Canadian Online Discount Stock Brokerage Comparison 2018

Notice: Although this Canadian online stock brokerage review/comparison is dated back to Dec 2006, the information below is updated regularly.

Are stock trading commissions eating away at your profits (or increasing your losses)? Ticked off at paying at least $29/trade at one of the big bank discount brokerages? Well, there are some new players in town! They are MUCH cheaper and offer similar features. Who are we talking about? From my research, there are a number major (cheap) discount brokerages in Canada that are worth mentioning which include: E-Trade (now i-trade), Virtual Brokers, Qtrade, Interactive Brokers, and Questrade (voted #1 by Million Dollar Journey Readers).

As an update and side note, almost all discount brokerages are very competitive with low trading fees (under $10/trade). In addition to trading fees, keep an eye on annual maintenance fees if you are below the minimum balance, and especially foreign exchange fees. Most discount brokers will hide the fee in the exchanged amount.

Lets do a little table comparing all the features (last update January 4, 2018):

If you are looking for a USD RRSP, for larger accounts (>$50k), I like RBC Direct Investing for USD RRSPs. With a larger balance, they offer relatively low trading commissions, no fees, and automatic journaling of shares (for the DLR/DLR.U trick). For smaller accounts, Questrade offers the best product. With a small balance (greater than $5k), they offer no fees, ultra low commissions, commission-free ETFs, and journaling of shares via online chat. Here is my Questrade Review that I’ve written.

For long-term index investors who use ETFs only, then Questrade likely offers the best overall product. No commission on buying ETFs and a no-fee USD RRSP for US-based ETFs.

If you are looking for an RRSP account to invest in mutual funds, then you have 3 options, big bank, E-Trade, or Questrade (additional fee applies).

If you’re looking for an RRSP account (with little interest in mutual funds) that has no fees, low minimum deposit, low commissions and you trade less than 790 shares at a time and LESS THAN 50 trades/year, then Questrade is your best bet.

If you’re looking for an RRSP account but with a larger balance and typically trade greater than 790 shares at a time and MORE THAN 50 trades/year, then CIBC Investors Edge is best.

If you’re looking for a non-registered trading account with ridiculously low commissions and margin interest, then Interactive Brokers is a no-brainer. There is a $10USD / month minimum fee with IB which means that if you spend less than $10USD in commissions in a month, they will charge the difference to your account. For example, if you spend $6 USD (6 USD trades) in commissions in a month, they will charge you an extra $4 USD. These monthly fees are tax deductible. IB also offers extremely cheap currency exchange. The biggest downside of IB is that you have to pay for your real-time data. I use IB for my trading and my big bank brokerage for my real-time quotes.

There is one feature that I like a lot about big bank brokerages and that is FREE dividend re-investments (DRIP). For example, if you buy enough shares of CIBC to pay you $100 in dividends/quarter (enough for 1 share), you can set it up so that your brokerage will automatically purchase more shares of the same company with the dividend payout.

I personally use a big bank for my RRSP and Interactive brokers for my non-registered trading account. I’m sticking with my big bank for now because of the free DRIP. Update Jan 10/07: E-Trade AND Questrade now offer free DRIP!

There you have it! A simple review of some of the discount brokerage options out there. I believe that it’s only a matter of time before the big bank brokerages start reducing their fees. In the meantime, look at your personal situation and see if any of the companies listed in my review suit you. You can potentially save a substantial amount of money.

Update Nov 2013: Lately, I’ve been more focused on reducing my forex charges which can add up over time. This is especially the case when buying US stocks within a Canadian based RRSP. To save on these fees, I wrote an article rating the top discount brokers that offer USD RRSPs. For ETF index investors, a discount broker that offers commission-free ETFs is a way to reduce trading fees when rebalancing and/or adding to the account. Here is a review of discount brokers that offer commission-free ETFs.

Update Feb 15/07: As you can see, I’ve added CIBC to the chart. With their new commission structure, you get 50 trades for $395/year. This works out to be around $7.90/trade with no limit to the number of shares you can buy. After the 50 trades are up, it gets even cheaper, $6.95/trade. What I REALLY like about this structure is that you can purchase the same stock as MANY times as you like during the day, and you’ll only be charged for 1 trade. The same applies for selling, you can sell the same stock as many times as you want during the day and be charged for only 1 trade. This still may not be the lowest cost solution for the small time investor, but once you start making bigger trades, CIBC has the lowest trading fee of all brokerages in Canada.. I commend CIBC for taking the initiative that the other big banks have not taken, that is to reduce trading fees for Canadians.

About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

I just recently signed up to ShareOwner Investments. They have some drawbacks, but at 9 bucks a trade for co-op trading, the ability to do scheduled automated trading and a select list of companies and ETFs it’s great for the beginner like me who wan’t to try my hand but doesn’t know a thing about what I’m doing.

Thanks for thus FrugalT, I was just about to open up an E-Trade account, but now I think I will reconsider and open up one at IB. I will be starting with a small investment, so $19.99/trade wouldn’t work for me.

I don’t see anything on their page or in my account details mentioning RRSP accounts. I assume that they don’t offer them. Co-Op trading saves cash by bundling trades with other people making it so you can buy any dollar amount of a stock or ETF. They kind of collect up a bunch of orders and then buy them all at once on your behalf. I’ve only recently signed up so that I can get my automated ETF investing under way so I can’t really comment on the service so far but you can read more on their page at:

Nick,
Perhaps you should look into Questrade as well as they have a low min, only $4.95/trade as well as real time quotes included.

IB doesn’t have real time quotes unless you pay for them. If you do decide to go with IB, make sure to try their demo software on their site. It can be a bit tricky at first, but once you get used to it, you’ll love it.

Actually… they do RSP accounts I think. They have an RSP administration fee and a Non-RSP to RSP transfer fee in their fee schedule, it’s just not displayed prominently on their page. Not too sure how to set it up.

Thanks for the heads up. The last time I emailed E-Trade, they did not support DRIP. Hmm… that makes it very interesting. Now, E-Trade offers everything a big bank offers, but cheaper. Perhaps i’ll wait until my RRSP value reaches 50k then i’ll transfer my assets.

How do you find their real time quoting system? Do they offer real time charts as well?

they don’t support native DRIPs offered by companies, meaning you can’t get the bonus that sometimes comes with “native drips”, but they do offer their own Dividend Reinvestment Plan on a lot of securities …

the real time quotes work great, you just need to accept an agreement first .. I don’t remember seeing real time charts (maybe they don’t offer it!?)

I think every one concern the investment safety. What are IB and Questrade’s backgrounds? Are they safe to your investments? That’s my one of the big concerns. Because all of us know these big banks well. But we dont’ for IB and Questrade.

Great articles – been reading some of the stuff throughout the web, but great to see someone compile everything about Canadian Finance into one site.

I wanted to ask about the ease of transferring your hard-earned cash into these discount brokerages. It’s the one reason why I am using the Credential Direct brokerage – they just decreased their fees to $19 per trade, and I don’t make many trades per month.

For those thinking about implementing the Smith Maneuver, you would not want to sign up for the DRIPs under the non-reg plans because you would want to use those dividends to pay down the mortgage, re-borrow, and then re-invest.

Qubikal: In terms of transferring cash to the brokerages, this is how I do it with IB, Qtrade, and CIBC:IB: EFT, you go into your IB account and request the money from your bank account. Takes around 10 days in total to get (approval process).Qtrade: Bill payment from online banking.CIBC: Request the cash transfer from within investors edge.

FrugalTrader: About safety. It is true that IB and Questrade are insured by CIPF but what it does not tell you is… you are not covered if IB or Questrade is stealing your money (fraud). Think about the Norbourg scandal. CIPF provides coverage for members in the event of insolvency.

I know Questrade has been in Canada for a few years now. My question is with other discount brokerages, are you suppose to provide them with your SIN number and your driver’s license info? I’m concerned with identity theft, should that be a valid concern? Any input would be much appreciated, thanks.

Dw: Identity theft will be a risk where ever you go. The key is to be proactive in protecting your information and regularly checking your credit report. CIBC has a free credit alert system if you have one of their visa’s. I believe that most, if not all, discount brokerages will require your SIN.

John: Thanks for pointing out Credential Direct. However, after briefly checking them out, yes, they are cheaper than the big banks @ low volumes, but not cheaper than Questrade ($4.95/495 shares or $9.99 for unlimited). At high volumes, if you are an active trader (at least 50 trades / year), it will only cost $7.90/trade @ CIBC with no limits to the number of shares. At Credential direct, you need to make at least 75 trades / year to qualify for the $9.95/trade. I guess it could work for some people, but it’s definitely not the best solution for everyone.
For those of you interested in checking out CD, here is the link:https://www.credentialdirect.com/Fees/CompareFees.aspx

A very good basic table. Here are a few further comparisons I’d find useful.
– forex rates into and out of the USD for an RRSP; if I sell then buy US holdings in my RRSP, BMO Investorline obliges me to convert back and forth into CDN$; what is the spread between USD-CDN buy and sell for different brokers?
– forex again: do any brokerages offer USD accounts within an RRSP? is this really against CRA rules?
– international diversification: do any offer reasonable cost trading in foreign markets? e.g. in the UK BMO will do it but at very high cost like min $170 per trade. there are discount brokerages operating in the UK.
– RESP accounts available?
– account performance and analysis tools: can one have overall registered plus non-registered summaries of returns, assets etc for people like me who who have non-reg, RRSP, LIRA? I manage my accounts as if they are one big one and must do all my own spreadsheets to do rebalancing etc.
– trust and estate tax summaries: do any provide proper tax summary forms for anything other than year-end Dec.31 for those accounts whose financial year-end is other than Dec.31?

In terms of purchasing USD investments within your RRSP, you will have to convert from CAD$ to USD$ every time. There is only ONE brokerage that I know of that will allow “wash trades”, and that is TD. When you sell a USD stock, instead of converting it to CAD$, they will instead purchase a USD money market instrument so that you can keep your USD. The downside is that you need to call them on the phone before you do such a transaction.

There are no brokerages in Canada, that i know of, that allow USD accounts within an RRSP.

Another useful piece of info is the fee charged to transfer an account out to another brokerage. These fees can be fairly punitive as the brokerages want you to think twice before leaving. Conversely, will the destination institution reimburse transfer out fees to get the new account and how much will they reimburse?

The new WebTrader Platform is expected to be available in the next month or 2 if everything goes well. I have not seen the platform but I’ve heard it will have level 2 quotes. I have not heard anything regarding free real time charts.

hi,
i am new to investing..wanting to open a brokerage account..i was looking at Canadian share owner, E*Trade canada etc…because of lower fees.. while browsing through the website http://www.dividendgrowth.ca…..it says we would be better of sticking with bank brokerages(even if expensive)because it’s much safer…

Sam: As Emil said, unless you have over $1 million to put into your portfolio eTrade and Questrade are both good choices. If you are starting off with a smaller portfolio, Questrade may be your best bet to keep the costs down.

Hey Sam,
Instead of comparing fees alone, why not compare the services. Questrade, I believe, is geared toward a more active investor. If you are someone who actively is managing your portfolio, have a few different trades every month or so and likes to shift money around I think this is the way to go.
On the other hand if you are more of a ‘set it and forget it’ and want to pick companies that you can do monthly deposits to for dollar cost averaging and want to check it every 6 months to a year or so just to re-balance I think ShareOwner is for you.

I opened an account with ShareOwner a while back. I haven’t made any trades yet because my significant other for some reason got an itch to buy a house so I’ve been a little busy lately. Once we get settled in I’m planning on getting a monthly ETF deposit in just to sit back and let things ride. At 36 bucks for a 5 ETF portfolio, I think I’m in it for the long haul.

THANKS to Emil,Frugal & Traciatim for your kind
replies…
i have read that these brokerages are insured upto 1 million..my current portfolio is only around $5,000…is there any way i could lose money in these brokerages,some acts on their part not covered under the legal fine print…

you might consider me paranoid..i am just hyper sensitive since i work for minimum wages…

and hi traciatim in shareowner..
if you were to invest $1,000 every month in 5 etf
$200 dollars on each ETf you pay commision of $36 every month..

if instead you invest in only the 1st ETF..all the $1,000 for the month…you pay only $9 commission..

in the 2 nd month invest all the $1,000 in 2nd etf..pay only $9 commsision…

if you keep repeating the cycle every 5 months..you commsions would be only 25% of what you propose to pay..for people looking for real term..i believe there might not be much difference investing $200 every month in an ETF..
or investing $1,000 once very 5 months…

If you’re looking at reinvesting small amount in the indices, perhaps you should look at the bank mutual funds. With the bank, you can purchase small amounts of each mutual fund every month for NO FEE. When you’re account rises above $20k, then consider moving to a discount brokerage.

HI FRUGAL,
thanks again for your prompt reply…
i am now using TD E-funds for indicies..MER is tolerable..but i now wnat to invest in Canadian dividend companies…TD does not have a elctronic(E) fund for dividens..just a regular fund..MER is very prohibitive…

I know my opinion is bias but I will lay all the cards in the table and let you decide which is the best way to start investing.

I noticed several different topics and I’ll try to tackle all of them at once.

Questrade does not have any monthly fees, inactivity fees or platform fees if you go for the WebTrader basic platform. That will offer you direct access trading without forcing you to make a minimum number of trades.

If you want to pick your own companies I would suggest going with a discount brokerage rather than going with ShareOwner investments. You have to keep in mind that ShareOwner will only allow the purchase of their pre-selected list of securities.

As for the fees, I was under the impression that you could set up a monthly purchase plan through ShareOwner and pay $9 each purchase for the first 4 purchases, then any subsequent purchases of that security are at no cost to you. So in your example of the single security for $1K/month you would be investing 991, 991, 991, 991, 1000, 1000 . . . and on an on.

As far as I was aware the $36.00 charge is if you set up a monthly purchase plan on multiple securities that it was a one time fee. It’s not very clear on their web site if it’s one time or not though.

Keep in mind with ShareOwner your purchase and sales are bundled with other people, so they don’t happen directly when you want them to sometimes. Like I said, it’s for more of the ‘set it and forget it’ people. It looks to me like you already have your indexing up and running for the ‘set and forget’ portion of your portfolio and are looking for more control. If this is the case, go with a discount broker like Questrade, E*Trade or something similar.

Hmmm, looks like I may have completely misunderstood their graph. I figured with the co-op investing that they could offer it for that price since they bundle everyones orders and there would always be someone paying for the transactions. Plus with the other fees for selling and transfers I figured they would get you in the end anyway.

It seems to make much more sense the way you describe it. Maybe I’ll just take my money back out and switch up to Questrade. Shareowner probably made much more sense when other companies were charging $19 a trade and bank brokerages were at $28.

That’s something I’ll have to leave to more experienced traders. The only things I’ve purchased are mutual funds for RESPs, Mutual Funds for my company matched RRSP, My Stock purchase plan at work, and I opened a an account at ShareOwner. I’m just starting out on my investing career.

I am just getting into DRIP and have an existing E-Trade account. So far I’m pleased with them, but their DRIP program mentions that you have to have enough dividends to purchase a full share, I thought this was dependent on the individual stock? Also does DRIP in your chart refer to DRIP and SPP?

Warren: The DRIP indicated on the chart represents the reinvestment of dividends when you purchase a dividend paying investment with no fees. However, this only works if you own enough of the company that the quarterly dividends are equal to, or greater than the price of the stock.

For example, if BMO is $70/share today and has a 3.54% dividend ($2.48/share), which means you would get $0.62/share/quarter. So at a minimum, you would need to buy around $70/0.62=112 shares to be able to repurchase 1 share of BMO every quarter. To be on the safe side, you might want to purchase a little more than 112 shares in the case that BMO rises above $70.

If you don’t have enough in dividend distribution in the quarter to purchase a share of the company, then the dividend will be paid out in cash to your account.

Anyone have idea how Interativebrokers charges the exchange rate? I got mixed information about questrade. I’ve seen 0.9%, 1.25%, and 1.5% in the comment streams. Even 0.9% would be a big transaction cost. I wonder how’s Interativebrokers relative to others.

Hi there. Thank you for this very informative article. I have a question about IB. You said that there’s a $10 / month fee. So does that mean that even if you don’t trade in a month they’ll charge you $10? I guess what I’m trying to say is that while IB is cheap when it comes to trading fees, you basically pay a sort of maintenance / activity fee per month. Clarification would be much appreciated. Thanks!

Yes, even if you don’t trade $10/month, they will charge you the difference. So the min amount that you’ll pay in fees with IB is $120USD/year. This is well worth the fee if you trade regularly, b/c $120/year is equal to about 4 trades with a big bank.

Hi,
Thank you for this wonderful info. I’m new to investing and been looking for a Cdn online brokerage for many months and finally found some up to date and useful information. I want to trade options and will want to trade from 15 to 20 trades a month. Questrade has the same price of 9.95+ and is equivalent to others. I also want to maintain a US account instead of switching to CDN funds each time. Has anyone had any experience working with Tradefreedom? I found their trading platform extremely confusing.
Thanks
Penny

Penny, if you are new to investing, you may not want to start with options. With that said, if you do decide to go with options and trading 15-20 times / month, then IB will be your best bet in terms of cost. Not only will the commissions be cheaper, the IB’s forex exchange fee is the lowest around.

I wanted to point out some differences between Questrade and the other brokers mentioned.

Questrade offers a free direct access platform called WebTrader Basic. With that platform you will only be charged the commissions whenever you make a trade. There isn’t a maintanance/innactivity fee.

A more advanced direct access trading platform that is excellent for trading options is CyberTrader. You can trade multilegged options and pay 1 commission for 2 legs. (Example: Spread = $9.95 + $1/contract)
The platform comes for free if you make at least 20 trades/month.

Tradefreedom does not have a platform that allows multilegged option trades. The Canadian commission on stock trading is not flat.

IB is well priced, but do not expect any service from them. If you are having problems with the platform or the trading, better solve it yourself. I have confirmed this with several IB traders. I think IB will admit it if you call them up.

The best value for you money is definitely Questrade. It is very well priced, and it offers the support that is so important when needed.

Try us out. The application is done online; it will take about 20 minutes to complete. There is no charge for opening or closing an account with Questrade. The minimum initial deposit is only $1000. I am certain you will very soon consolidate all your accounts with Questrade.

Great website/table/information. This is something I’ve been looking for for a long long time so thank you.

One thing that would be really useful is a rough idea of the forex rates for the various accounts. I can say from experience that TDW is around 0.9% spread each way for a total of 1.8% there and back. Does anyone know what CIBC Inverstor’s Edge is like, or what questrade’s is (perhaps Emil can answer?). This would definitely be a column worth adding.

I’m a fellow Newf presently living in Saskatchewan.
I do my investing thru RBC Direct Investing and I must say I’m getting fed up with the $29.00 trading fee. It is abit much especially after reading on your website about Quest Trade’s fee’s. I’m seriously contemplating switching. I’m holding off becasue I do use RBC’s market commentaries on Canadian equities (there buy,hold,sells etc). Can you tell me if Quest Trade offers such market commentaries. I checked out there website but I’m still not totally clear on this. Thanks for your help and keep up the excellent work. This is a great benefit to many people.

Hey Paul, thanks for stopping by. As far as I know, Questrade does not offer market commentaries. What you could do is keep enough in your RBC account to avoid the maintenance fees, and put the rest with another brokerage.

I am currently in a trading course and paper trading for experience. I have started to research canadian discount brokers and I am very impressed with the info and knowledge I have found here.

My cuurent plan is to open a registered account and I was leaning towards CIBC’s Investors Edge because of the fee schedule. I will be an active trader, but won’t be trading a lot of shares per trade to start. Then I heard about QuestTrade and their fees work even better for me as most trades will be under 1000 shares.

My biggest concern with a Registered account is the exchange rate to USD. I plan on trading NYSE and NASDAQ as well as TSX, but to pay an extra 1% when making a USD buy, and another 1% when making a USD sell is crazy. Am I misunderstanding how this fee works?

Moe, if you want to USD stock actively, then doing so in your RRSP is not recommended. As you pointed out, cash needs to be converted every trade. Even if you wash trade with TD, it would take WAY too long for an active trader.

Keep your active trading outside your RRSP so that you can maintain a USD account to avoid the fees. If you’re going to be doing a lot of FOREX exchanges, then no one comes near IB. However, Questrade is a decent choice also.

Direct access technology is a desktop software or web-based trading application. When linked — ideally by a high-speed connection — to the Internet, that platform becomes your own personal trading floor. Live market data from market makers, securities exchanges and ECNs update in real time. Traders or investors can spot price differentials, trade volume, liquidity, and other market intelligence, and act on it directly.

This is an enormous change from pre-direct access, when information was masked by the middleman — full-service brokerages — and all trades had to be funneled through a number of steps – any of which could slow or alter the original trade.

The ability to see market opportunity in real-time and act on it immediately means you have a better chance of capturing the buy/sell price you’ve targeted. Through a traditional brokerage, the lack of control after you’ve placed your order can significantly impact your profits and/or losses.

In fast moving markets, order execution speed can be the difference between a gain or a loss, between taking advantage of an opportunity and missing it entirely. Direct access almost eliminates the time gap between execution and trade confirmation as well.

Slippage, the gap between the estimated cost of the transaction and its real cost, is an important factor when executing a trade. This is particularly relevant in a fast-moving market. There are other hidden costs at non direct access brokers as well that affect the prices that consumers receive. Direct access is the most transparent method of accessing the markets.

I understand the direct access platform, thank-you. Another issue I have when choosing a discount broker is I am a Mac User and I haven’t found any brokerages that offer a desktop platform of the Mac OS, thus leaving me with Web Access as my only option. Does your WebTrader still offer the same level of control and speed as your CyberTrader platform?

The CyberTrader platform is not available anymore. QuestraderPro is another software based platform that we have. QuestraderWeb is a direct access platform as well. It is slightly slower than the software based platform. Instead of the order being executed in ½ a second, it may take a second or two until the platform responds.

Unless you are trading based on tickers (minute by minute trading) I don’t think it will make a big difference.

Hi Emil – Yesterday, I bought some US securities in my rrsp at Questrade – I phoned to find out an exchange rate and one rep said they charge 0.5%, another rep said 1% and you say it’s 0.5%. In the chart above – FT has 1% for this.

Can I assume that you are correct and it’s 0.5% (50 bps) when going from Cdn$ to US$?

Just an FYI – If you want the TD Waterhouse low commissions ($9.99), one of the two basis is the final balance in your account each month. So if you join early in the month, your account value at last month-end is deemed $0 and you have to pay the $29 for the first month. Better to join a few days before the end of the month.
If based on number of trades I don’t know for sure.

Sam, ETF’s are traded on the stock exchanges, so all of the discount brokerages mentioned in my article have access to the same ones. If you want to research more info on Canadian based ETF’s, you’ll have to visit:http://www.ishares.ca/

Hello. I am a new investor looking to open an account.. i originally was going to use ETRADE due to their low fees. However, Interactive brokers and questrade look even better. But, do either of these services protect against fraud. The 2007 october review by the globe and mail does not indicate that questrade guarantees that members will not lose money if their account is acessed by a hacker? they got a 0 out of 5? And interactive brokers were not even reviewed?

Melvin, I agree that Questrade doesn’t have very high security compared to other brokerages. They only require a login and password. E-Trade and Interactive Brokers now require a keyfob encryption passkey with every login along with the pwd.

Melvin, the keyfob encryption is basically a device that gives you a passkey to type in at the time of login.

In terms of security, they both use the same web encryption as any other brokerage does. However, how they deal with fraud cases i’m not sure of. It really comes down to the user keeping their passwords safe (imo).

thanks for the quick response.. i really appreciate it. The two most important things to me is security and low fees.. So i guess i will research further. This may be a silly question, but how does trading U.S. equities work as a canadian and the exchange rate? Thats an additional chrg on top of the fees/commisions?

Melvin, there are a couple ways that you can trade US equities. You can purchase US dollars (exchange fees – see article above), and purchase US shares. Or, you can get a margin account and purchase US shares with that account. Purchasing with the margin account will hedge against currency flucuations, but interest will be charged.

Im just about to go ahead and open an Interactive broker account.. Ive done my research and what not.. Just wondering, anything that stands out in your minds that i should address or consider before I go forward?

and how long does it take to start trading, once i send my papers/check?

The paperwork is quite extensive. How secure is this process of opening an account? All of our information is being sent over the web ex. Social security #, correct? dangerous?!

Melvin, IB uses secure web encryption like any online bank. Also when you get your account, they will require a login, password, and encryption code before you can start trading. Definitely among the more secure online brokers out there. I know that my accounts with CIBC and Questrade don’t require encryption keys.

I’m an E-Trade customer, and I can tell you that yes the 4.15% is only offered on the “cash optimizer” account. And, you can’t make stock purchases directly from that account. But you can make instant transfers into your other cash account and buy from there. Strange but true.

I am looking for cheapest Discount Brockerage Service for my RRSP and going to invest to ETFs
Who knows the answer for these two questions:
1. Why MER for Canadian ETFs ~ 0.5%, but in US Vanguard MERs are ~ 0.07-0.22% for the equal fund. Where are not expensive Canadian ETFs
2. RRSP and US funds – exchange rates is one of te issue. TD Waterhouse recommends to use “Wash” Trade. It looks it is a big advantage to save money on exchange. Can anybody comment it?

Paul, MER’s for Canadian ETF’s are so expensive because we lack competition in the ETF market.
The exchange rates are listed in the article. TD is the only brokerage to offer “wash trades” that I know of. Canadian Capitalist has written about wash trades a few times on his blog.

Paul – I joined TDWH in September with a lot of cash and began building a Portfolio over the past two months with a lot of US trades.

Just make sure when you do the washes that you check that they have been put through on the settle date. It’s a laborious manual process and mistake-prone if you are trading a lot. Staff is good about it but just look over their shoulders.

Hi Frugal, thanks for the quick reply.
I am a very new to trading, so forgive me if the following questions are common knowledge:

1. The fact that IB changed it’s minimum fund requirement (which I consider to be a major change) so suddenly and without even an notice doesn’t seem to be very professional to me. Specially after I have completed, singed, and mailed all the forms! This makes me wonder the IB’s credibility(and of other smaller online brokerages).
Does the Canadian Gov guarantees the funds deposited in these online brokerages just as they would with regular Canadian banks? Or is there nothing preventing IB from going belly up ( supposedly)and taking all you cash with it?

2. Is there a credible source where I can look up the credibility of online brokerage firms?Ie any place where these companies have to be listed? Like a government run institute?

Frugal:
thanks allot for the info. CIPF website will be most useful.
Btw, I did call IB, but all I got was “I don’t know”, and “there’s no way around it”. But I guess that doesn’t matter now.

Yes I did see Questrade,but to get that price, they want over 100k of assets or over 150 trades a quarter, otherwise they are no different than TDWaterhouse, is that correct?
Since I am a recent college grad,and just starting to trade, I am out of that category.

So would IB be my best bet for now then? or is there anything else that fit my requirements a little better?

No Questrade only requires $1k as an initial deposit and the $4.95 or $9.95 trades are for everyone regardless of portfolio size. If you aren’t trading very often and with lower capital then Questrade is your best bet. You can find my questrade review here.

Thanks FT
I have just read the review. Looks like a good choice for me. I will read more about it later. But one of the comments following the review brought up the point of wash trading.
From my understanding, at IB being a Canadian, to buy any US stocks I need to open a margings account, and buy any US stocks on marging. And then pay for it using the daily exchange rate.

Now how does that work with Questrade? So if you were to use it, you really have to pay 1.9% of the trade value?

cebolao, if you are a new trader, i would avoid IB anyways as it is meant for more experienced traders. Not only that, you don’t get free stock quotes with IB, they’re extra.\

If you are just starting out, Questrade is probably your best bet. No mins, low commissions, and free quotes.

Also, IB doesn’t have an RRSP account whereas Questrade does. To my understanding, you don’t “need” a margin account in order to trade US stocks, you simply buy USD and trade the US exchange. You can however use margin to buy US stock also.

With Questrade, within the RRSP account you’d buy USD with your Canadian dollars. So you’d pay an forex rate when you buy AND when you sell. If you open a non-registered account, then you can purchase USD and trade US stocks as you please without paying forex with every trade.

FT, thanks for explaining all this.
I will call them tomorrow, and hopefully everything goes smooth. Meanwhile, when you said I can buy USD without paying forex, you mean Questrade wont charge me the 1.9% fee? To my understanding forex is just a on going market rate for USD/CND right?

cebolao, sorry, I wasn’t clear. If you buy US stocks within your RRSP account, you’ll have to pay the forex TWICE. If you buy stock within a non-registered account, then you can buy US dollars directly and only end up paying the FOREX once (unless you want CAD again). Oh and Questrades rate is closer to 1% not 1.9%.

I was unpleasantly suprised to discover that TD Waterhouse has raised their foreign exchange CAD->USD fee/spread from 0.9% to 1.4% for up to $10k USD. It’s 1.3% for $10k-$25k USD, and 0.7% for over $25k USD. This quietly happened sometime in the last three months. That puts a big damper on the commissions dropping from $29 to $10 for assets > 100k last year.

Sorry for my ignorance, but what is this “spread” that I keep on reading regarding forex?

And also I want o 100% clear, to my understanding, if I open a CND account with questrade, and I want to buy american stock this is what I need to do:

1. buy USD using CND CASH I have in my account, at the on going market ( can this be called forex?) exchange rate. ( or is this rate set by the brooker? which in this case would be questrade)
2. Pay the extra fee of 1% ( or whatever that number is) on the total amount exchanged.

3. Use the USD just bought, to buy US stocks

Is that correct?
Can I have 2 accounts:?
1 account for trading canadian stocks, and link it to my CND bank account, and
1 US account for US stocks and linked to my US bank account?

With this, wouldn’t I be able to just exchange funds between my bank accounts and avoid the 1% exchange fee?

1. Spread is the currency conversion difference between what the broker charges you or gives you (rate set by the broker) and the ‘spot’ rate. ex: http://finance.yahoo.com/q?s=CADUSD=X (set by the global market)

2. The spread won’t show on your account activity or statement. They don’t want it to be transparent.

3. Yes

You definately should have two accounts. My two TD Waterhouse accounts are linked to my two bank accounts through the President’s Account Moneylink system. That minimizes currency conversions. Don’t know if Questrade offers this kind of system.

The reason I asked is because during my application with IB, they told me that I can’t not have 2 different currency accounts(ie USD and CND). If I chose to buy US stock and my account is CND,( or Vice versa), I have to have a margins account, and buy that stock on margin and repay later.

So far still playing with the questrade web.
And i dont see an option for currency exchange.
1 more question to ask them.

Hey guys,
Ok, I called and got most of my questions answered:
Yes I can have both USD and CND accounts with the questrade, and link each to a USD and CND account at my bank.
And all accounts are defulted to be margin.

However they couldn’t answer my question about the spread in forex. Actually it might be because of my limited understading in this matter:
To trade(exchange USD/CND) in the with an Forex account I only need to pay a 3~5 spread on top of the spot price. and the minimun is only $2500 for standard account, and $250
But when I want to exchange US to buy US stocks, the spread is 150PIP each way.

So why would I choose the second option over the first one? whats the catch?

The customer rep at questrade was very patient, and explained to me that these aren’t the same since there is a market risk involved when I trade forex. But just exactly what this risk is to be worth the 150Pips, I didn’t quite understand.
If any of you can point me to a thread that explains this a little better that would be great! thanks

FrugalTrader,
Looks like it’s back to square one on your foreign exchange fee/spread table. Cebolao just reported 1.5% for Questrade (up from 0.5%) and I reported 1.4% for TDW (up from 0.9%). Fees are restructuring; in one pocket and out the other.

Cebolao,
I don’t know about forex accounts, but worth looking into. Hoping a Questrade user enlightens us here. Meanwhile, I’m trying a simplified version of Norbert’s gambit as a foreign exchange loophole. Will report on the results next week.

Osmium, thanks for the note.
Yes it’s 1.5%(150PIPS each way). I was unsure about this number until I had web chat with one of the cutomer reps, who later comfirmed this again on the phone. Seems like the registered RRPS remains to be 50PIPS.

I really would like to undersdand the “risk” of the open forex marked that the questrade rep told me about on the phone. He was nice, but I really didn’t wanted to hog all his time asking something that i could have learned myself.

But still no luck finding it ..
And like some one posted above: to pay $300( 150 each way) on a 10K trade just on exchange rates, really seems to be alot to me.

I dont know what kind of risk in the open forex market there is to be worth paying this much premium to avoid it

ok So I started my application for Questrade.
Now I can understand why they need my Sin #, or a second ID for verification, and i guess there’s no way around that.
Now why do they need to know where i work, and all my work related info?
I am really uncomfortable giving out all that detailed private information! Feels like I am serving myself on a platter for identity fraud and asking for trouble.

So my question is this:
Which part of the application do I have to give them truthfully, and which part i can get away with random BS?
I don’t want to lie, but not even IB asked for all these details.

Hey FT, I just mailled the paperwork for Questrade. I put Milliondollarjourney under my referal, just like you said under your questrade review. Now they told me that person who refered me need to mail them my email address for this to work?

$USD to $CAD or vice-versa without any foreign exchange spread–Tested and works!

As promised, I’ve tested a simplified version of Norbert’s Gambit as a foreign exchange loophole, and I’m pleased to share that it works. I’ve posted an article comparing different ways of doing this on Financial Webring where this was first discussed:

TradeFreedom.com
I have an account with them. They have great rates, and great Windows platform. (rich client Windows app that you install on your desktop) They also have a Web interface which lets you do all the trades, quotes and account maintenance, but it needs some work to make it look nicer. The Windows app is great, real time quotes, blotter, watchlists, all that you need. Trades are around $9.95 per trade (I didn’t quite figure out the formula, but it depends on how many shares, at what price, but for my last 5 trades I paid $9.95, $10.08, $11.03, $10.02, and $10.08) They have been bought by ScotiaBank, but so far they are running the shop independently. I suspect ScotiaBank will try to bundle some products there (I hope). I would like to see great FX rates and great premuim interest rate for cash balances. Currently cash balances earn 0% interest. With TradeFreedom you can have CAD or USD balance on the account. To transfer money to TradeFreedom, you just set-up a bill payment on your web banking, and there you go, you “pay a bill” to transfer any amount to your TradeFreedom account. To transfer money back, you need to call them, and after password validation on the phone, you can tell them to EFT your cash amount back to your bank. This takes about 2 days to EFT (electronic fund transfer). I believe you can open an RRSP with TradeFreedom, but I haven’t yet. I like this platform, and I hope it gets better with new management of ScotiaBank.

TradeFreedom is literally the most expensive of the direct access brokers. Disnat Direct and ETrade are both far cheaper, if you are doing any volume of trades at all.

TradeFreedom is using a strategy to suck in small accounts or those who do not take the time to add up the numbers, by making its platform “free”… when it is far from it. With every trade, you will pay more.

Bear in mind that virtually every “direct access” brokerage these days is using the identical tools from Nexa technology, and most (perhaps all?) are using Penson Financial for their back office. Perhaps TD ActiveTrader might be the one exception for back office handling.

So you are getting the same tool, and for all or almost all brokerages, the same back end processing. Bear that in mind when looking at costs.

If your account is relatively small, and you do not trade very often at all, then TradeFreedom is a good provider.

However if you are at all active – even swing trading I push through more than 30 trades a quarter – the transaction costs will quickly make TradeFreedom the most expensive choice.

I’ve done the following costs based on 120 trades a year, moving 10,000 shares each time. 4 brokerages do not offer a direct access capability… and in those cases, even if prices are similar, you are likely to suffer from increased slippage that will be much more than commission in the long run.

I’ve plugged in 125 a month for eSignal for those brokerages which have no real time charting package.

Re commission, the devil is in the details. All of them have different approaches. TD and Credential are the cheapest for active traders because they are not passing on “removing liquidity” fees from the TSX (all these figures are based on worst case TSX trades, but would be similar with US ECN fees). In addition to ECN/TSX liquidity fees, TradeFreedom also charges 1 cent a share.

These pennies all add up rather quickly. Better to pay for your tools up front, unless you only plan on trading a few times a year.

eTrade is #2 ranked right behind TD because they cap the removing liquidity fee at max 30$. If you are trading larger sizes, this is very useful in holding costs down. For those with larger accounts, you can get their platform and commission rates without meeting minimum trade volume. This might be useful for those who trade more actively at different times of the year.

A note on ScotiaMacleod Direct (SMDI) – if you are active with them and/or have a larger account, push them for a “flat” rate. Its still far from great, but instead of paying 200$ on a larger trade, you’ll pay 14.95 (or perhaps 8.95) although they will ding you for multiple fills on the same order on the same day – bad practice compared to the rest of the crowd, but still far cheaper than their standard brokerage rates).

TradeFreedom is unable to be negotiated on pricing, but they tell me that they are going to have to respond to market pressures. TD is really putting pressure on people.

One thing to always consider before you switch, call your current broker and “complain” politely. I was able to get the same commissions than the “active trader” package at my broker, Disnat (9.99$ per trade always instead of 29$ per trade yukk!). Bottom line is it pays to complain a little, as with pretty much anything in life. Just gather a little bit of info and make it look like you’re just about to switch to another broker (and preferably mention their name to actually show you did some research).

I agree with Bruno, and in fact over the two weeks prior to sitting down with TD Waterhouse, I had called Scotia Macleod more than 6 times to a) complain about rates, and receive an adjustment (not enough) b) seek any information they could give me as to whether they were working on any programs which would be better suited to me, an active trader with a non trivial account, c) see if their subsidiary, Tradefreedom, could come up with a suitable program (they tried, but not in time).

After switching I’ve had occasion to talk to a few representatives of SMDI and have had mixed commentary from them, but no one, no where along the way, has said “hey, I’ve got a deal for you”.

In my case my annual commissions were larger than the average Canadian’s annual RRSP account contributions… by a factor of many times.

The only conclusion I could come to was that SMDI is quite content to market to a specific type of customers and let the larger banks get the rest, which happens to be the lions share.

Another approach:
One rep at Scotia suggested I try to get a better deal after I’m gone. Once you leave a broker, its very likely you’ll be offered a better deal to bring you back. The problem with these organizations – common to many sales organizations – is that they are not motivated to do anything they (individuals) are not specifically compensated for. No doubt the New Accounts group get bonuses based on the intake; while customer service and operations do not.

Sorry, I’m not interested in switching brokers over and over, and its unlikely that SMDI would be able to meet the cost *and* offer the same type of services (an active trader solution).

Having eliminated cost per share pricing model, cost per trade value, cost for removing liquidity (common among all direct access brokers *except* for TD Waterhouse), there is very little opportunity to further reduce costs. I don’t see the smaller brokerages being able to touch these low costs for active traders… not any time soon.

(Before I launch back into the topic – Bruno, can you comment on your deal with Disnat? Is it 9.95 ALL IN? Or 9.95 plus 1 cent a share plus removing liquidity fees, if applicable to a specific trade?)

Back on topic:
In fact over the two weeks prior to sitting down with TD Waterhouse, I had called Scotia Macleod more than 6 times to a) complain about rates, and receive an adjustment (not enough) b) seek any information they could give me as to whether they were working on any programs which would be better suited to me, an active trader with a non trivial account, c) see if their subsidiary, Tradefreedom, could come up with a suitable program (they tried, but not in time).

After switching I’ve had occasion to talk to a few representatives of SMDI and have had mixed commentary from them, but no one, no where along the way, has said “hey, I’ve got a deal for you”.

In my case my annual commissions were larger than the average Canadian’s annual RRSP account contributions… by a factor of many times.

The only conclusion I could come to was that SMDI is quite content to market to a specific type of customers and let the larger banks get the rest, which happens to be the lions share.

Another approach:
One rep at Scotia suggested I try to get a better deal after I’m gone. Once you leave a broker, its very likely you’ll be offered a better deal to bring you back. The problem with these organizations – common to many sales organizations – is that they are not motivated to do anything they (individuals) are not specifically compensated for. No doubt the New Accounts group get bonuses based on the intake; while customer service and operations do not.

Sorry, I’m not interested in switching brokers over and over, and its unlikely that SMDI would be able to meet the cost *and* offer the same type of services (an active trader solution).

Having eliminated cost per share pricing model, cost per trade value, cost for removing liquidity (common among all direct access brokers *except* for TD Waterhouse), there is very little opportunity to further reduce costs. I don’t see the smaller brokerages being able to touch these low costs for active traders… not any time soon.

Just for the record SMDI’s new active trader platform does not charge each time there is a partial fill as was suggested in a previous post. You will be charged a separate commission if you place multiple orders for the same security on the same side of the market in the same day.

Example:

Place order to Buy 5,000 shares @ 5.00

1st fill 2,500 shares @ 11:00
2nd fill 2,500 shares @ 12:00

those 2 fills would be consolidated and charged one comm $14.95 or 8.95 depending on your tier (based on # of trades per quarter)

Nitz01: SMDI does indeed charge, via their “active trader” commission plan, for multiple fills, same day, same order. I have the commission bills to prove this.

Re the 5382 – that was a cut and paste error… not sure where it came from. SMDI is closer to 16 – 17K for the example basket of trades I used to model costs. That’s based on larger orders (5000, 10000 shares) getting 2, or 3, fills, while smaller got filled once.

Is it possible they are charging some people for multiple fills, and not others? Sure, its possible. SMDI is not well organized for the active trader crowd.

Looks like it was an error in your comm charges in that case. They don’t charge a separate comm on partial fills. Personal experience.

Partial fills should not be charged a seperate commission. They are consolidated overnight. (it is a manual process). If however it is 2 separate trades than it would be subject to a separate commission.

For SMDI, if you are doing 120 trades per year @ 10,000 shares a trade the total should be $1,794 = 120 * $14.95.

*** this assumes you place a single trade for the full 10,000 shares 120 times per year.

Nitz01 – I hear what you are saying, and indeed their own order confirmation screens indicate that same day same order multiple fills should all be on one ticket/one price.

However that is a) not what is (was) happening and b) specifically not what one of their reps informed me on the phone when they set me up.

At the time of being “blessed” with the flat rate, the rep on the phone also rattled off other things which I would not have access to, such as Quotestream (I’ve no use for it anyway). I was struck with the impression that they are actively seeking to discourage people from going to the flat rate. No surprise – flat rate (as I modelled it) is 16K; the non-flat rate model puts the same basket of trades at 160,000 in commissions.

Every time my commission rate has been changed, its as a result of *my* actions. Years ago I easily qualified for “select” status; I was looking at transaction costs way back and phoned them up and was told “oh yeah, you qualify, let me bless you”.

And so on. High rates effectively work to reduce activities; at times I would neglect our RRSP accounts and just work on income producing trading in futures. SMDI loses in both respects.

Very predictably I look at my returns in RRSP, decide I need to spend a few weeks jacking them up to 20, 30, 40%, and I do – and commission bills again go through the roof, I call SMDI, they offer me whatever rate plan of the day they have, I meet my goal, and ticked off by high transaction costs, go back to futures and a real order entry system.

This cycle is a little different. There is sufficient competition and competitive offerings out there; I researched, found an appropriate alternative, and *then* gave SMDI and Tradefreedom every opportunity to try to retain my business… and nothing.

I accept that your experience / rates might be different with them – that jives with my experience with them. I see multiple commission hits on some multiple fill orders; on others I see commission values which make no sense whatsoever. 5000 shares, multiple fills, 16.98 commission. Just doesn’t add up. Perhaps they aren’t disclosing some of their fees – I don’t know, but I’m done with guessing.

The real problem with SMDI is that they have not recognized that the industry has multiple types of participants and they are not catering to several subsets of participants. Perhaps that’s intentional – I can respect an intentional business decision, but my sense of SMDI is a few executives with fingers in leaky dams.

If only they were pro-active they could earn more customer loyalty. They a) do not pro-actively identify customers that *should* be at these rates, and b) have a myriad of special deals with customers. I’ve had SMDI reps tell me I’d be better off leaving, and then coming back and negotiating a rate at that time.

That’s no way to run a railroad.

I’m sure if I pushed the point I probably could have achieved a truly flat rate, but their other key deficiencies (from the perspective of my longer term needs) made that a non starter. I’d been managing “ok” for some time, but the trade/order entry process really was a kludge which I kept working around… being ticked off with their handling of rates pushed me into looking afield for a more compatible broker, fees, and platform.

Regarding the difference between your calcs and mine, leaving out the multiple commission whacks per fills, my model costs ALSO include commission AND the use of a real time charting/quoting package. I used eSignal basic service fees for charting/quoting costs if a brokerage did not provide a charting/quoting package.

SMDI does not provide an integrated order entry/quote/charting package. Their web interface is somewhat better (with the revisions they did over the last year or so) than TDW WebBroker, but certainly is not on par with the direct access features offered by Active Trader and similar competitive offerings by the other, smaller, firms.

For an active trader, a static (non real time, non streaming) web based order entry system isn’t suitable. One penny on a trade pays for platform fees – if I had to pay them – for brokerages that charge fees for such things.

Bottom line:

– TD 7.00 or 9.95 truly flat. Acceptably powerful order entry, advanced order types. For TSX names – for direct access brokerage – they are without doubt the cheapest in Canada right now if you trade frequently and in size, and need the features of an advanced order entry/account management platform.

– SMDI? 9.95 or 14.95, possibly flat, if the sky is blue and the moon is shining. You’ll need a large account, and lots of activity. No powerful order entry or advanced order types, not even a trailing stop.

My accountrs are with TD Waterhouse. They do not offer trailing stops and GTC orders. Stock prices in the account are updated next day so cannoy sell a stock based on the price shown. Amertrade was able to offer both traling stops and GTC orders. TDW bought out Ameritrade and yet they do not offer what Ameritrade was offering. I am sticking with TDW because I have consolidated my registered and non-registered accounts with TDW plus because I have banking relationship with them for a long time. I have written to them about this but they are content to be the largest discount broker in Canada! I am thinking of moving at least the non-registered accounts to another broker. Does E-trade offer trailing stops and GTC orders? How soon they update the stock prices of securities already in the account?

I am interested in finding a discount brokerage that allows me to set up a non registered account but I am planning to only do a couple of transations a year (buy ETFs and rebalance once in a while, think couch potato investing). You recommend Interactive Brokers for non registered but when I read description is seems more suited to active traders. Any other recomendation for hat I am looking fore (with low budget to start with, about 5 to 10 k)
Thank!
Emma

In addition to Questrade (small independent) and Tradefreedom (small independent now owned by Scotia Mcleod) you also have other choices some of which may influence your decision based on where you bank.

Or your decision might partly be based on where you live – if you are from Toronto you can go to the offices of most brokerages and sign up there with knowledgable help right in front of you. Larger brokerages have remote offices. Disnat would be a good choice for folks from La belle province.

You may find it more comfortable to deal with someone at your bank or a street corner office of a larger brokerage than to work remote control with others (such as IB or Questrade/Tradefreedom if they don’t have an office in your locale).

You’ll get a “flat” fee for trading 1000 shares or less more or less everywhere. Given your account size, you are likely to be trading smaller sizes than 1000 shares more often than not. QTrade or IB both have the cost edge for sub-1000 share trades. If you only trade 100 shares, IB is only 1$.

However IB doesn’t now nor will they likely ever have RRSP accounts. Having one broker to meet all your needs can be a positive which even if you don’t need it now you may in the future.

If you only plan on trading a few times a year, costs are not quite as big an issue as they might otherwise be.

But if you expect to trade more over time, or have other accounts which will bring your total account value up to the minimums that some brokerages require before they give their lowest fees, then perhaps you should look more closely at the range of offerings.

I pay the 29$ regular as for any bank when you have low trading and less than X$ worth of stocks and cash.

Their website is reliable, they answer emails very fast… but they have nothing distinctive that could make someone switch to them.

They do not DRIP any Canadian Ishares!

I am unsatisfied with the transaction fees that I have to pay because they will reduce them only if you have $250,000+ in the account with them (or trade 30+ by quarter, which I do not want to do for sure).

I am currently considering other brokers, this thread was really useful to learn more about the different alternatives.

– borrowing to invest in the six figures. IB’s rate is prime – .75% whereas a HELOC will probably be at prime.
– purchasing a basket of Canadian dividend paying stocks. Lack of DRIP aspect is a negative.
– will probably make 1-2 trades/month (taking dividends and buying ETF perhaps). Likely in the 25-50 shares/trade. No penny stocks.
– no plans for options, etc. at this point
– already have RRSP’s with another broker

I’m wondering how I can access IB’s margin capabilities. Do I borrow half of what I intend from my HELOC, purchase securities and then borrow the additional money from IB to purchase the remainder of securities?

The item I’m drawn to most is the savings on borrowing for investing. That would work out to hundreds of dollars / year even factoring in the tax deduction.

currently I have a TDW non-registered cash account… bank with TD so its very easy to transfer money, no fee’s etc… but the commission of $29 is ridiculous.. honestly it would be pretty much perfect if I could get the $9 trades from them, but I am not going to be trading 30 times a quarter, and even if I do im not willing to pay $29 for 30 trades to qualify…

whats a good alternative to TDW with no fee for maintenance or transfers etc, easy cheap exchanges to US$, easy transfers, security, and cheap trades for a portfolio of around 10k or under ?

I have my long investments done already with TDW so those are locked in… but basically I want to have a comparable brokerage to TDW with cheaper commissions so I can play around with trading a bit, $29 commission is to much to do this with..

also I might be buying some stocks under $2… at TDW I believe commission for this is 1.5% prinicipal or minimum $29… anything better then this?

If you have a reasonable relationship with TD perhaps ask them if they have options?

I am considered by CRA to be a professional trader, and have low cost brokerage accounts (IB for futures) but even with that in mind, I paid Scotia Macleod Direct fees – 25 – 29$ per trade. Yes, its a lot to pay if you have a small amount of funds to trade with; but that should give you some discipline to trade less, but trade better.

We’ve just gone through the work to centralized all of our accounts at TD, pulling in accounts from Scotia and several other brokers and mutual fund companies. Having all our accounts in one place, a big chartered bank, one not as tainted by the credit issues going on (CM is), gives me some comfort.

I like IB, but I feel better having my money in a Canadian bank these days.

i agree about having my money at a Canadian bank, and i definately want to have the ease of having my money and accounts all at TD… and I am planning on calling before switching, but $29 is just plain to much for how much cash im playing around with

country Currency/Code Client Buys (Pays Canadian) Client Sells (Receives Canadian)
United States Dollar (USD) 1.024000 0.979000
—- this is a spread of 4.5 cents, or around 2.25% for each buy or sell.
This is the reason I dumped scotia mcleod and went to tradefreedom, which charges less than a tenth as much.
BNS not only gouges, but conceals the evidence of the gouging in their statements. The forex amounts never specify the fees, just the totals.

“The only drawback of questrade is that they don’t provide wash trade like many other brokers except TD waterhouse. If you are in Canada and mainly play with US stocks, you have to suffer the loss of currency conversion every trade. They charge 0.95%, so a buy/sell action will cost 1.9%. For $10,000 trade, it is $190, which is not acceptable.

Another broker TradeFreedom charges much less, 0.2%, which is $40 for $10,000 trade. So it only beats TDW when the trade is less than 10,000.

So that’s why I still stay with TDW.

Just a personal thought.”

just a quick question on this… I am trading US stocks, and I did a foreign currency conversion in my TD account(s) from CAD to USD to do so… once I sell my purchased stocks in USD the funds go into a US money market fund and I do not get charged any more exchange rate fee’s etc until I decide to tranfer the money back into CAD ?

is this not the case with IB, CIBC, or Questrade ? you get charged other exchange rate fee’s with them ? does this make the lower commissions with them not worth it ? I think im missing something here or not understanding it 100%

From your reference to forced currency conversions, I presume you are writing about trading U.S. securities in RRSPs. I’d like to clarify Questrade’s service, as it has changed significantly since the review you quoted.

This past January, Questrade launched a USD in RSP service that allows clients to hold both Canadian and U.S. currency in registered accounts. In other words, clients can settle U.S. securities trades in USD and Canadian trades in CAD and avoid the foreign currency spread from forced conversions.

I hope this will help anyone else using Interactive Broker’s for the first time as this mistake cost me a few bucks.

If you set up your IB account to be funded by a bank account using an EFT, you first have to go through a test to make sure everything works. They put in a small amount into your account and then withdraw a small amount.

Once you go through that phase (which takes a up to a few days), you are then ready to be able to transfer large amounts into your IB account.

So, you go to the deposits/transfers page and choose EFT section. In there you have an option to choose the name you assigned to your funding bank. You then go to a page which only has one input – a dollar amount. What you do NOT see is the name of your funding account (so if you have multiple ones, you better be sure you chose the right one).

You then enter a dollar amount and hit continue. BAM! The transfer instruction is gone and there is nothing that can be done about it. There is no confirmation page summarizing what you attempted to, there is no do you want to proceed. No, the EFT instruction has been sent and good luck if you made a mistake like I did.

I have never seen any online brokerage or bank or even etailer that didn’t allow you to review the instruction you gave when it comes down to money.

Let that be a lesson to you all – it cost me an overdraft charge because:

1. I believed IB when it said the bank would simply reject it and nothing would happen.
2. I didn’t call up my bank to let them know that this error was going to come through and issue a stop payment.

I really don’t like IB’s interface – it is really not user friendly at all but that is the price one pays.

Cannon, yes the IB interface is not very intuitive. I would suggest that you run through the demo a few times before making trades. IB has the ability to make really quick trades via their interface, which is ideal for “traders”.

OK, hopefully this post gets seen somehow. I really like this site but was suprised that I couldn’t see a general forum anywhere, so my only choice seemed to be to comment on the most relevant posting and hope for a reply.

I’ve been meaning to set up an account with a discount online brokerage for several months. Between focussing on paying off debt and pure laziness, I haven’t actually pulled the trigger yet (and thank god considering the meltdown). I’ve also been waiting for Surviscor to update their Summer 2008 rankings – which were due in September.

My question:
I bank and have a credit card with BMO and also a long history of 15 years or so. I’m looking at Investorline but the other options also seem attractive. How much of an advantage is there in sticking with BMO for my investing? Does it matter? Are there benefits? Is there any risk in “holding all my eggs in one basket”? I expect my style will be 80%Investor / 20%Trader.

Hey Greenhouse, picking a broker is a highly personal thing. One thing I would point out though is if you are starting with no investments it may be better to buy some index funds or something along that line until you can get a few grand together making your transaction fees lower.

Say for instance you open a TD E-Funds mutual fund account. There are no transaction fees at all and you can set up a monthly payment plan. If you were to do something like put 500 bucks a month in to 2 different stocks each month and your transaction fee is $4.95, you are eating up near 2% in transaction costs.

On thing you may want to look at is simply setting up a high yield saving account with a regular automatic savings plan and once this amount gets over a pre-set amount (say 2500 bucks) then search for one single stock to purchase or try something similar to this with ShareOwner Investments. ShareOwner lacks some flexibility, but if you commit to doing a once yearly contribution to 15 stocks that you like at the time your transaction fee will only be a total of 36 bucks (0.06% of a 5000 purchase).

Once you have a substantial amount set aside (say $50K+ or something) you could transfer to a full service broker or discount broker and the transaction fees as a percent of your total invested will be much easier to swallow.

Great post. I’m currently with E*Trade, and I’ve been having a lot of customer service issues with them. So I keep referring back to this often as I consider changing my discount online broker.

A great addition to this review would be to include whether or not the discount broker offers electronic trades on the Pacific Exchange. This is of particular interest to me lately since I hold several Vanguard ETFs in my RRSP account, and they were recently moved from the American Exchange to the Pacific Exchange.

I would expect that many other people hold Vanguard ETFs in the investment portfolios as well, so this information may be of interest to a large group of people.

I found that E*Trade does NOT offer electronic trades on the PCX. You can call in and make a broker assisted trade, and they do waive the $35 surcharge for broker assisted trades in this case. However, when I did this I found it very slow and time consuming — generally just an inconvenience.

This would be a great piece of information to add to help me make my decision on who to use for a discount online broker.

I was an E*Trade and Investorline customer at the same time. The higher trading fees at BMO, issues with getting simple things done like monthly preauthorized withdrawals and higher account minimums to reduce/eliminate certain costs made us move. We needed to have $250,000 in our BMO RRSP’s to enjoy some of the same features that E*Trade would provide for only $50,000.

We transferred out of E*Trade to RBC DS for a year and then transferred back. (A good friend joined RBC DS and we were working with him. In hindsight, the lack of DIY with RBC DS was far too restrictive for me.) In the end, we transferred back not to Investorline but to E*Trade.

I’m not saying that E*Trade is the best, just that for me it is better than Investorline.

The only aspect of why I will switch to etrade when I hit the 50 000$ threshold is because they offer alittle more bells and whistles. I want my online broker to have a performance history either be it on a monthly, quarterly or yearly. If i read right etrade offers this.

If anyone is with etrade can you please let me know if they actually have this.

I would love to go to IB, but I forgot to mention that my holdings are in a rrsp.

I’ve been using Scottrade until recently when I moved to Canada. After reading this blog and several others, I thought I’d give Questrade a try. But my experience so far has been anything but frustrating.

First of all, they are really slow in opening my account. It took them several weeks to open the account. Then, funding the account has been near impossible as I have been trying so many different ways in the last four weeks to move the money from my bank account to the Questrade. I thought everything finally worked after two weeks when I got a notification, so I logged in and made some purchases. But then, a few days later, they call me and say they didn’t really get the fund transfer (even though they had my check and they could easily fix whatever the problem they had). Because the money I used to buy the stocks didn’t make, they told me that they would liquidate my position. I begged them not to sell and offered whatever the money needed to cover the position as soon as possible, they still liquidated, giving me an instant realized loss of 15%.

I immediately made another authorization. It has been another two weeks and half. They took the money, but I am still without access to the trading platform. Now they are tellling me to exchange currency (without knowing how much money that I have in my account) and rejecting the request if I guess it wrong.

The whole process is very confusing, and the customer service tells me there is no tutorial :( I never had anything this confusing and bureaucratic process.

I have been with TD Waterhouse for many years but I am thinking to change to Questrade. Does it cost anything to tranfer money to Questrade or back from Questrade to the bank account? How long this transfer take?

My experience with Questrade has been horrible at best. Now I am reading similar sentiments from prairie_dog above and several other readers.

After hearing so many good things about questrade from Frugal Trader (this site), I transferred part of my international portfolio when I moved to Canada and have since wasted countless hours just to execute simple trades. 3 weeks to setup the account, 1% forex spread during trading hours, wash trades not executed as instructed to cust rep to name a few.

Digging deeper into this site, it looks like FT is getting plenty of advertising and referral $ from questrade. Isn’t this gross conflict of interest while recommending them at the same time? I can understand if FT decides to remove this posting but I sincerely hope he would respond.

Ahmad,
While I can’t speak to the blogging world, I do know in the print media that advertising & editorial departments are completely separate, and one has no authority over the other. Thus you have editorial content which may or may not favour advertizers, sometimes unknowingly. I expect a blog is little different — either advertising is supplied from a subscription (eg. google ads) or advertizers seek out the publications in which they want exposure. Therefore, if RFD, or Questrade or others wish to advertize on MDJ, they contact the publisher and enter into a contract, or they address it through some form of aggregator where the ads are distributed to blogs.

Also, remember a blog is entirely editorial — it really is one person’s opinion, and although Frugal Trader attempts to publish with balance, we are not looking at in-depth investigative journalism here; rather a variety of opinions meant for exchange of ideas.

People have had a variety of experiences with Questrade (and other on-line discount brokers), some satisfactory, some unsatisfactory (I’ve had none), and I expect your experience is within that range of variability. Beyond commenting here, continue to press for resolution with Questrade, and if you choose another broker, drop by with your experiences.

Yes, I can see how it appears to be a conflict of interest. The truth is, I joined Questrade almost 2 years ago and I’ve yet to have a problem with them. Granted, I only do very simple trades with them but I would not continue to recommend Questrade on this blog if I didn’t believe in them.

Hi, I’m a newbie looking to open a non-registered account, am not looking to do a lot of trades per year (at least not for now). Which one would you recommend? Amongst the big bank brokerages, which one is most preferable?

newbie, if you want to stick with the big banks, I believe that TD Waterhouse has the best reputation. However, note that they all charge fees if your account is below a certain balance. If you want a cheaper solution, do your research on tradefreedom, Questrade, and e-trade. The review links are in the post. Hope this helps!

I managing my friends account in Etrade. She has both registered and margin account. What bothers me with Etrade that for registered accounts they don’t offer Money Market funds like every other discount broker that I worked with. The interest on credit balances is almost nil. Actually they offer MM but require holding of 3 month which defeats the purpose of transfering cash to MM. There is a penalty charge for early withdrawal. I am looking for a direct trading brokerage to open a TFSA and move her accounts from Etrade. Her total portfolio is about 90k. My personal account is with TDW and is on lowest trading fee schedule. But for her the trading fee will be $29 which I find too expensive. Assuming 12 trades per quarter do you have any suggestion?

hey i recently looked into TDW, their fees just went up and are killer:
Canadian equities= 35$ + .06$ per share
US equities=39$+.08/share
options=35$ +3.5$ per contract
yeah, how can they call this a discount brokerage?
you can get deals though, like, if you do 150 trades/quarter you can just pay 7$ a trade… but if your mgmt is too active you’ll likely lose money anyways…

Among all the options, Questrade seems to fit my needs the best, but boy, their customer service is ever unhelpful! Processing new accounts is ever so slow, and they will no contact you even if there is a problem (They just put your account on hold and wait for you to call them.) I first opened my regular stock/margin account last year, and it took about a month to open that account (It required several trips to the banks and multiple attempts to electronically fund the account.) Now I am trying to open a TFSA account, and I started the process in the beginning of February, and it is still not active yet (March 1).

I know the cliché of “you get what you pay for,” but I had a Scottrade account when I was living in the U.S., and I was treated with respect. I can’t wait to have enough account balance so that I can afford to switch to another firm with better service.

I’m new to buying stocks etc, I’m currently employed with Citigroup. Is there an issue if I open up a Trading account with any of the above listed websites. Also would I be classified as a Professional Subscriber or Non-Professional subscriber what exactly do those represent?

I will not recommend Trade Freedom to anyone. Their customer service is absolutety horrible, always on hold and was treated terrible as well. Even the smallest problem is not taken care of, Account Managers who do nothing and their servers are still not reliable in 2009. Their data fees are not cheap and they want you to do 150 trades per quarter to have any of them waived, which is pretty high.

Unfortunately none of the banks are any better and I’ve seen TONS of complaints about Questrade all over the internet and their terrible service, long waiting times to open accounts, etc etc. Its too bad these small companies don’t understand how to take care of customers, that is the way to grow and have yet more customers. Questrade also charges for their platform and data fees unless you do 40 trades per month which is also very high.

IB not having RRSP is really a deal killer, I mean they need to get with the program, that is an awful lot of business they are throwing away.

I see Creditial does not even charge for data fees, does anyone have any experience with them?

Any other suggestions?

Etrade looks to be okay but they charge 100 per month for their platform.

Scotia has recently launched “Scotia iTrade”. This is etrade Canada with Scotia makeup. I got an email from my Scotia Mcleod account saying they will be integrating all the accounts. And I’m happy to see that they will be reducing the fees to etrade levels.

I am currently with Questrade for my RRSP & TFSA. Their fees are cheap compared to the rest of the discount brokerages in Canada, but based on my experience with them, they have the worse customer service.

It takes on average more than 5 business days for them to reply to emails. I have tried to call them during business hours many times, and found myself waiting hopelessly for eternity for a agent. It appears no one is working at their call centre/support line. In fact, I seriously think they are very understaff!

I usually wait about 1 month for them to process my pre-authorized deposits, so by the time I actually get the funds transfered into my account, it is already too late and I would miss my buy points of the stocks I follow.

Their trading platforms are the lowest quality I’ve seen in the online discount brokerage industry. Research tools are very poor. Free services such as Yahoo Finance and Google Finance provide much better tools than Questrade’s.

I’m also with TD Ameritrade, Bank of America and TradeKing – all based in the US – and the quality of service and technology I get are far better than what I get with Questrade. TradeKing offers the same low fees as Questrade, but their service is very good – in fact one of the best. I remember posting an email after hour and 5 minutes later I received a phone call from their end – I was very surprised at that level of service at such low fees!

I would advise those who seek quality of service to go with the big banks or at least not with Questrade. If you’re cheap like me, than go with Questrade but expect it to be your worst discount brokerage experience.

I have had the single worst experience of my entire life with Questrade over the last few days, as I write this MY ACCOUNT IS MISSING $923.45 or 35% of my entire account balance & life savings after 3 CONSECUTIVE DAYS OF ACCOUNT IMBALANCES. I am actively spreading the word of my ordeal through any medium I can until the problem is fixed I have gotten a letter to the editor posted in the Kingston Whig-Standard and am awaiting publication of my letters to the Toronto Star, Toronto Sun and the Globe and Mail. My uncle is one of the webmasters at Craig’s List so I should have a leg up in informing as many people as possible.

I have personally traded stocks, options and funds for 7 years and ETF’s, FOREX and bonds for 5, so I consider myself informed about the online broker business. I am not a wealthy person but I enjoy investing in a ‘hands on’ fashion. I had an account with E*Trade for 6 years with no problems. A few months ago I left them for Questrade because of the cheaper commissions and their favorable consumer ratings.
Up until the morning of March 5, 2009 I had a very good experience with Questrade, I even got my account set up in only 4 business days, which was very impressive!

*Note all figures include commissions and exchange rates at the time of the transaction. Also, I have a TaxFreeSavings account, which means no margin account, no loans, no borrowing, no overdrafts. I can do transactions up to my current cash balance, any more money and it will reject the order because of insufficient funds. I can prove all claims/ figures through screen shots of history and physical account activity forms mailed to me after every day that I traded. With that in mind……

The night of March 4, 2009 at 4:05PM I bought 23 shares of FAZ (an ETF) @ $79.80 USD=$1,840.44 USD (total after trade commission) x 1.27(the exchange rate at the time)=$2337.36 CAD worth of stock in my account + $54.72 CAD in cash left in my account=$2392.08 CAD is my total account balance.

The morning of March 5, 2009 at 9:33AM I sold the same 23 shares of FAZ I carried over from the day before @ $86.86USD=$1992.81 USD (after trade commission) x 1.2785(the rate at the time)=$2547.81 CAD + $54.72 CAD (cash left in account since night before)=$2602.53 CAD total cash in account now. But there was actually $2232.04 CAD showing in my account balance when I checked it after the trade like I always do. That means my account was $370.49 CAD… just like that.

I’m not going to go in to greater detail but the same thing happened the next two days as well taking $165.04 CAD on the morning of March 6,2009 and then again for $396.96 on the morning of March 9, 2009. I suspended my account at that point and stopped trading. They had taken $923.45 CAD by the end of it, or 35% of my life savings (I am still young and busy paying off student loans). I would’ve suspended it after the first day but they assured me it would be fixed and after the second day I was waiting for this manager to call me back, which he failed to do.

Now you would think that in the face of this irrefutable evidence, and the fact that they admit a computer glitch took money through faulty a exchange of currency from a bunch of other people’s Tax Free Savings Accounts over these same days, that they would admit the error. Boy was I wrong, the real fight had just begun as I spent 2 hours and 06 mins. that day (have long distance phone bill to prove it) on the phone to 3 different people at customer service, trading desk, etc. They just tried to explain it away going down a checklist of things;didn’t add in trade commissions (even though the totals I used from webtrader history have them added in), exchange rate (which I took from the forex website), my miscalculations, etc. Each person would say they would “send a report to the back office and someone would follow up with me in the next few days. Guess what, not one of them did, I called again on Friday March 6, 2009 and asked to speak with a manger that didn’t call me back for 4 business days and when he did he brushed me off, even though they admitted “some money was taken from my account and put back”, $181.82 CAD on March 5, 2009. He refused to understand that I sold stock for this price and then my account balance said I had much less then what I sold the stock for, even though this is very simple concept. Robert Chandler is the name of the “manager” I spoke with. He at one point 30 mins. into the conversation said hold on for 5 mins. and pretended to have an audit done on my account, even though another manager told me audits take at least 3-5 business days. Apparently Rob is a superhuman adding computer… either that or a bald faced liar. I called him on the amazingly quick audit he was able to do and he hung up (I have a witness who was also listening to the call), after 45 mins. of denials. I spoke with him a few days later and said he couldn’t bully me into submission, that I wanted a real audit of my account. He told me a real audit is $75 an hour charged to my account. I asked if Questrade was found to be at fault, would the audit be free? He said no the audit would be around $500.00 in total and would not be refunded even if they found that Questrade took money from my account.

I then attempted to go higher then Rob by using this excellent comment post and contacting Emil Vojkollari and Nicholas Roussos who seem to help people on this blog solve problems with Questrade, and guess what? I have left 2 messages for Emil seeking assistance in the matter and 4 for Nicholas asking him for help as well and both HAVE YET TO RETURN ANY OF MY 6 MESSAGES. That is not client support, that is an abomination and I intend to make it my hobby for the next few months until every cent of my $923.45 CAD is returned to me with an apology of mass proportions. The ironic thing is that after my forensic auditor finishes his assessment I can take them to small claims court where if found guilty of taking money from me they would be on the hook for $1000’s to pay for my legal counsel (my dad, who charges $300/an hour) and $1000’s for their own legal counsel plus have to explain the verdict to the IIROC Canadian securities regulatory body and risk losing their retail broker license.

Sorry it took so long to read, but PLEASE, ANYONE WHO DOESN’T ALREADY HAVE AN ACCOUNT WITH QUESTRADE…DON’T, ANYONE THAT HAS AN ACCOUNT ALREADY…CLOSE IT. THIS AGGRAVATION HAS GIVEN MY WIFE AND I WEEKS OF SLEEPLESS NIGHTS AND UNTOLD STRESS. This recession has been hard enough on everyone let alone being taken for 35% of my families entire savings. Questrade are at best a terrible company with horrendous customer service and complaint response, and at worst criminal with gross misconduct on the part of ROBERT CHANDLER. You don’t hang up on someone or lie and say you are doing an “audit” that was magically finished in 10 mins. instead of the standard 3-5 days. The fact that neither Emil nor Nicholas has bothered to return my calls proves that the upper management is also not taking customer’s complaints seriously. It’s sad what this world is coming to sometimes, I hope between the huge ad on Craig’s list and the letter in the Whig-Standard, the letters hopefully in the Tor. Star, Tor. Sun and Globe & Mail: people will recognize the absolutely vile way they have handled me. I was only trying to get my family ahead using a discount broker to save fees, I didn’t deserve this, my wife didn’t deserve this and my 5 month old daughter certainly didn’t deserve this. Shame on you Questrade.

Zack, thanks for your information! I was about to open an account with Questrade….now i’ll have to think about it.

I would like to open a TFSA account with either Tradefreedom, iTrade(etrade), or Questrade… well I’m a complete newbe so i’m taking small babysteps…

I have a question for you folks using TFSA as trading account, I’m only looking to have it as a simple cash account (no margin, borrowing, etc), buy stocks and ETF up to the balance of money i have.

What I dont understand, or the CS failed to explain to me is, eg, I initially fund my TFSA with 5K, and then, say i’m very lucky and very patentice to be able to make 5% to 5250, and buy again using the 5250 to buy and make another 5% after 4 months, etc… the earnings+intial fund will be more than 5K. Is this allowed without having the CRA penality? Can I use the profit I make from that 5K to buy again and expect no tax on them?

In reality, my initial fund will be low (~2 to 3K) to learn some experience and insight, what would you experienced traders suggest to use? I am steer towards Tradefreedom right now.

And what would be the difference between a TFSA and a Cash account (eg Etrade, no margin etc) besides the 5K limit?

@ babysteps: I know some people have experienced problems with Questrade customer service, and I admit they are not the greatest (zack also posted a complaint on my blog), but if cost is your concern questrade cant be beaten.

As for your limit, from my understanding as long as the money is within the TFSA you can keep it.so if your 5k grows to be 5250 you can use 5250 to buy other stocks without any penalty. if your 5K goes down to 4K you can NOT add an extra 1K to bring it back up, so it works both ways.

Difference between the different brokers you mentioned are mainly cost. FT has pointed this out in his comparison, as have i.

itrade and questrade are the only ones offering FREE TFSA accounts. and trading costs are also lower.

itrade=etrade since scotia took over etrade they renamed it itrade. They are somewhat comparable, but itrade still cheaper with their regular commission (19.99 vs 29.99 TD) and their TFSA account does not have a fee. As well the min. account seize for discount is lower.

In spring 2008 I wrote about moving to TDWaterhouse from Scotia. I had carefully entertained moving all our accounts to various other brokerages including Questrade and TradeFreedom. ETrade I never seriously considered.

It’s my considered opinion that for me, an active trader trading in size and frequency, that moving to TDWaterhouse was the very best decision I could have made.

Within a couple weeks of moving my per trade costs dropped from an already inexpensive *FLAT* rate of 9.99 to 7.00. I pay nothing for the platform to trade upon.

FLAT means whether I trade 1000 shares or 20,000 shares, I pay $7.00, regardless of which account I trade in – RESP, RRSP, cash, margin, etc. I have never seen a commission cost other than 7$.

At the time I did the comparison between brokerages most had per-share, ECN, or removing liquidity fees. Provided you use auto-routing with TD (I’ve never once felt I needed to do otherwise) you may no liquidity-related fees.

Not only is the service stable, fast, reliable – but I’ve found all my interactions with staff to be top notch. Our account transfers were handled quickly; since then we’ve consolidated a few other smaller accounts and they’ve treated us in the same manner as they did when we moved our major accounts over.

What I notice most is the consistency. TD acts the same way, in my experience, all the time. Maybe I’m just fortunate to hit the right people all the time, although truth be told I’ve not had many occasions to dial them up – things just work.

I did not experience that consistency as an active trader with Scotia McLeod Direct Investing. I had to go out of my way to get a cheaper rate, despite having known some of the people in the active dept. since Schwab Canada / Priority Brokerage days. Their systems, and front line staff, just are not geared for folks like me, nor the ongoing trend in the industry. Perhaps wtih iTrade that will change but I remain a sceptic for now.

While my style and level of trading is clearly not for everyone, if you are an active trader, particularly if you focus on Canadian markets as I do ad trade in some size, TD Waterhouse Active Trader fee structure is very cost effective. Its a reliable tool in my kit and I cannot recommend them highly enough for those whose activities look more like mine than those of the occasional trader/investor.

[1] “The above pricing does not include the market and ECN fees that are applied to all trades executed through the Scotia iTRADE Pro platform. ”

Good luck in finding what those fees are. Nowhere are they clearly linked, a deceptive sales practice bordering on the fraudulent. “Hey, our price is this”… but when you get to the checkout its “this plus THAT”.

@Ray: “itrade and questrade are the only ones offering FREE TFSA accounts. and trading costs are also lower.”

Actually, Credential Direct and Qtrade also have free TFSA accounts. Sailing has been pretty smooth with me at Credential, although if my assets manage to grow past $50K, I would seriously consider iTrade for the lower fees. Since that’s not gonna happen for a couple years, I’ll wait and see if their fee structure remains stable post-merger.

TD Waterhouse charges $50 annually for TFSA; but it (and all other account types) are free for accounts subscribed to eServices (i.e. electronic, not snail mail, statements and confirmations) with total household account assets >= 100,000.

sorry if this has been posted already, iTrade’s new fee when assets are below 50,000 or with 29 or less trades / quarter is 20.00 + 0.02 cents / share above the first 1000 shares. so lets see, my 11,000 shares would cost 220.00 to sell. thats a 2% commission assuming the shares trade at 1.00 9which they do!) unless i’m making some big mistake.

hi again re iTrade fees, thank you for the follow up. i took a closer look, the 0.02 cents a share applies to shares valued above 1.00 and that policy has always been like that. when i bought the shares they were just below 1.00 so the fee was a flat 20.00 but now that they are just above 1.00 it would have cost / will cost 220.00.

I am planning to invest in ETFs, Futures , Stocks in International /Emerging markets. is there any brokerage / Platform available where i can invest directly in international markets in all the above instruments.

The new ” Scotia ITrade” fusion will look nice on paper but as a Tradefredoom client, i’m scared like hell to loose my freedom soon and get the bill for that fusion + poor service !!! Don’t know if it’s the same for ”ex-Etrade” clients ???

They’ve recently advise us of more fees for the data and soon it will be for the trading desk itself…visit the new web site https://swww.scotiaitrade.com to see all those new fees coming soon near you + it’s now very hard to get any answers clearly from their ”back office” rule about certain new fees lately…. doesn’t smell good at all… anyone have a good plan ” B ” to propose ??? Tks

Scotia Itrade is pathetic. Their customer support is terribly inadequate. Itrade is notorious for losing personal documents in their departments, causing unecessary delays in opening and administering accounts. This has resulted in lost investment opportunities, for which I trade takes no accountability. They regularly lock up funds and assets due to their own incompetence.

Their representatives are incompetent and have been caught lying on the phone. Stay away from this company. They are expensive, their investment platforms are inadequate and their service sucks.

TDW margin rate (for me) is prime plus 2. I haven’t been able to negotiate that down in several years of trying, so I finally moved my eNorthern margin acct (via questrade) to TDW.

TDW RRSP fees are $100 per year if you have less than some cut-off. (You say $25K; I seem to remember $50K). However, if you’re only doing mutual funds and bonds, you can get an account that charges $25 a year.

For beginning investors i would reccomend Q-Trade. As much as the commissions may be high, the help desk is top-notch. I call probably once a week. Here’s why i think qtrade would be best for newbies like myself.
1) I’ve NEVER been put on hold. Not for a minute, not for a second, not ever.
2) The staff speak clearly and will spend as much time as you require to answer your question.
3) I’ve asked questions ranging from the most basic investing questions; “why can’t i short ABC stock?” to the most advanced straddles and strangles questions i could muster. It is like having your personal trading encyclopedia just a phone call away.
4) The same people work at the call center daily! I know, amazing. No turnover as far as i can tell. That makes things allot better when you know you’re not going to get some pimply faced little kid who hates his job commenting on how to run your life savings.

I’ve been extremely impressed with qtrade thus far. The commisions might be a problem later, but knowledge is more valuable right now. I must say, i wouldn’t be the trader i am today without the help i’ve received from qtrade.

Last winter I investigated all the online brokerages, and decided to go with Qtrade also. I was a trading beginner, and also find that their help is very, very good. at first I was intimidated to even ask questions, but now I call anytime. They have been great.

I now have over 100K so got my commissions reduced greatly. I have moved all my “remote” (as in scatterd) RRSPs and cash accounts to Qtrade, so to make my investments more manageable. They will cover transfer fees up to $125 per account that is over $25K.

Does anybody deal with Disnat? They seem to have $5/trade >$10 000, which seems to rival all the best cheapy ones ($30/trade<$10 000 though). They also have TFSA’s and RRSP’s. I’m thinking of opening up with them, but really can’t find much info on them online, other than their own website…

I want to open up a Interactive Broker account to do some day trading possibly. I am planning to invest 10K to open up the account, maybe withdraw 5k back once the account is open and do my trading with 5K. Should I be aware of anything with Interacive broker? Anything funny? Secondly does anyone know if 25K minimum limit also applies for trading in canadian exchanges for day trading. Finally if anyone is already doing day trading, how do you report income from dividend, capital gains?

I visit theis site frequently, but rarely post. I love the site. I have a question that I hope someone can help with. I am just getting started investing my TFSA, using Credential Direct. I am only starting with $1,000 to get the hang of online trading, before putting more money into it.

I have a question about the fees for online trading. How are they paid? Say, I have $1,000 in my TFSA account and want to invest $900, leaving $100 in my account. Then, the fee for the transaction is $19.95 — does that get deducted from the same account leaving a total of $80.05(ignoring taxes, etc) in the account?

I have searched the site and am not sure how the fees and commissions are paid?

Thanks for the quick answer.
Another quick question. I emailed(after business hours) Credential Direct on this, but figured it wouldn’t hurt to post the question here to see if anyone might know the answer.

I finally tried to purchase some U.S. stocks (AMTY) with my TFSA account, but the trade request was denied stating that these stocks were not eligible for purchase under a TFSA account. Is this due to the stocks being in U.S funds? Is anyone familiar with Credential Direct or is this a TFSA issue?

Just an update to my issue with purchasing a US equity through my TFSA. I tried again today to purchase a US equity with my TFSA, after the market opened, but still an error message displayed as TFSA ineligible. I called Credential Direct and they stated that AMTY, the stock I was buying, was an over-the-counter(OTC) stock and as per CDN Govt rules, could not be purchased with a TFSA.

This seemed a little odd to me as it is listed with NASDAQ — I am not quite sure what identifies it as OTC — I wish I had asked, but I was not near a computer at the time of the call.

i have read thru the majority of these posts and they are totally helpful.
i’ve been watchin the market for about 7 years, basically since i was in skool. i finally pulled the trigger on the market back in august. i used tdw. man they are pricey, i’m talkin about the 29 per trade deally. i guess its not too bad if you have tons of coin in the market but I don’t. I recently called CIBC investors edge from what i understand they make you buy a pkg of 12 trades. the cost of this pkg is 99 beans. it works out to 7.90 per trade. thats a far cry from 29.i’m thinking of going that way, hell it would save me tons of quon. i figured out i spent 800 quon in commissions btw aug and sept. with IE i figured out i woulda spent 200… thats a rediculous difference. any one tried IE? what do you think ? i also thought of different stradegies i might have employed with cheaper commissions. i think i really blew a wheel by not doing my due dillegence when it came to brokers … and trading stradegies. does any one have any trading stradegies they would like to share ?

I just wanted to point out that I saw a yearly brokerage review/report in the Globe & Mail recently and discovered something amazing (well at least for me).

I’ve been trading the international market a lot more recently but only by means of ETF because our banks thinks those markets are not important and don’t offer them to us.

The only one for which offers anything but the North American markets are Interactive Brokers. But for one, they don’t offer RRSP or TFSA accounts and their customer service support doesn’t seem too great either.

But none-the-less, I found out that HSBC offers many European and Asian exchanges (direct and non-direct). And you can also have RRSP and TSFA accounts to do this too.

They may not be too competitive in price and support but at least one bank (non-Canadian) offers it.

Does anyone have a US brokerage account. I have one with first trade but they are telling me that i have to close it because i’m not a US resident?? I have had it for 10 years.
Does anyone know of any brokers that are accepting non resident accounts??
Any help would be great!!!

Just read the TD Waterhouse fees for 2010, which come into effect March 15th, and I’m not pleased. trades will now cost a minimum of $43, and there is significant upside on them depending on stock price and lot size. No longer qualifies as a ‘discount brokerage’ for me. I’m back in the market for a new provider, and will likely switch my TFSA over before the fees come in to effect. Not a heavy trader, just trying to direct my own tax free savings. Will likely go with Questrade unless I hear of another low-priced competitor with fewer complaints on this site and others…

I am looking for a good and cheaper discount broker too. But definately I will not choice Questrade. There are so many complaints from Questrade clients. Questrade does not treat its client well and so many people switched out. You better read customer comments before you open an account with them.

Do not open an account with iTrade. It has been a month and they still have not been able to open an on-line account for me, due to their incompetent staff. Their customer service phone line is always busy, and you are on hold forever. Be warned, iTrade is the worse.

I just want to express my frustrating experience with BMO investorline. I transfered my account from B2B a/c to BMO investorline, I was expecting some reimbusement of fees. Guess what, for $15,000 value account they offer only $25.00 refund on transfer fees. There are so many others who offer a lot more (even RBC discount brokerage offers more than $100).

BMO investorline boasts of large selection of funds on their website. That’s true, but you can’t buy most of them. How funny? Why do they display funds on their shop front that they can’t even sell.

I was not able to buy some simple index funds offred by TD bank via BMO investorline.

Like Benjamin Graham once said,” the investor’s cheif problem-and even his worst enemy-is likely to be himself.” I can only blame myself for making a poor decision and not doing enough research about BMO investorline.

My feedback may help other potential clients look to switch to BMO investorline.

@MDJ – You don’t suppose it’s time to update those charts above? 2006 seems like an eternity ago!

Just to add to AK’s comments: No matter how much research you do, you still end up on the losing end. Brokerages rarely tell you everything on their site until after you open an account. Extra fees and “bundling” of products (such as allowing you to link only their own bank account with the brokerage account – apparently illegal in Canada) are very common. Even those “surveys” are suspect since they cannot get personal contact info from the brokerages and are often paid for by the brokerages themselves. (or the info is provided in aggregate from the brokerages).

@Jay: I don’t recommend going with CIBC Investors Edge. I’ve been with them for about a year with a registered trading account, they totally suck. They advertise $7.9 commission, but you’ll see how many times they will be unable to fill your order, I’ve had one what they filled in in 5 parts charging the $7.9×5 for the trade. We’ve sent our transfer-out forms to their Toronto office in March. 2 weeks later since nothing happened, I gave them a call to follow-up. The guy said ‘Ah that address is not the right department, I need to resend the forms.’ The other address is in the same block, but no, they don’t forward the papers. Ok, we’ve sent the forms again, guess what it’s June, but they’re still sitting on the money. Very bad business practices. And all this for $150 Transfer out fee.

I have a Questrade account, signed up with eStatements but noticed that I had a charge for $1, and $0.05 GST for a ‘mail confirm fee’. I emailed customer service and they responded with “I am sorry for the inconvenience. You should not be charged this fee, and I will put request to rebate you this amount.” I’m disappointed that it showed up in the first place, if I hadn’t checked my statement I would have been charged an extra buck. I’ve had a good experience with Questrade so far so I’d just say review your statements every once and a while.

I am puzzled why TD-Waterhouse has not been included.
There may be a minimum balance required to avoid any annual fees,
But all stock trades are $9.99 and options seem to be $9.99 plus $1.00 per contract.
Drips are automatic. Real time quotes provided as well as reports from most major companies that have reviewed the stock in question. e.g. for RIM they have Standard and Poor’s, Reuters, Ford Investor Value Graph, etc.
A lot of features are included. Also easy switching to/from EasyWeb.

@David, are you actually with TD Waterhouse? I’m curious because I’ve been to a TD shop several times in the past few years. And believe me that once you actually ask questions about their platform and fees, you realize that they offer nothing but standard bank services and fees.

When I asked them about all those ads I saw on TV, they said that’s for the Americans… go figure! When I ask them why Americans get to trade at such low cost (no strings attached) and why they charge Canadians so much, their answers are… “there is little competition in Canada”. That’s directly from the mouth of one of their managers.

Don’t forget that all the big banks offer the low $9.99 deals, but in reality it’s set up in a way that its hard to get those deals and keep them. You must maintain the trading levels or loose it and must re-qualify each time!

I and others may have had frustrations with Questrade… but you’ve got to admit… they are unbeatable in regards to prices!!! Let’s hope they will commit to their clients by listening to their needs and keep innovating while keeping costs as low.

I heard TD Waterhouse is good but the price is high. I know Questrade has low price but their customer service is bad. I am thinking of using iTrade because it has lower price. Is anybody still dealing with iTrade? Is iTrade getting better now?

I agree – in fact, I left TDW because the new fee structure requires a minimum transaction cost of $43 up from $29. As a low frequency trader with less than 100 K to invest, switching to Questrade made sense. haven’t had any issues, but have only made a couple of trades thus far, so we’ll see how it goes.

CIBC Investors Edge has no compassion for small time investors. I’ve been trading with them for years reaping from me thousands of commissions. They have no consideration at all. Don’t open an account with them. Try questrade or trade freedom.

I have several years experience with Questrade, and I am planning to switch my last account with them. I have aready transferred out my major accounts.
They lost my mails to them for at least 2 times. If you don’t track your mails, I am sure they will lose it.
Their service is as cheap as their price or even worse. If you think you don’t need their service, just trading , you are wrong. Sometimes you have to use it like DRIP request. Moreover, my accounts with them always have unknown credits and debits ( though balance is zero). and they just say sorry to me.
one time, my ever DRIPed stock’s dividend was not dripped, they just lost information. and asking me to send them again the request in mail.

Does anyone have any experience with RBC Direct Investing? As we are already RBC customers, I was thinking of opening an investment account with them and transferring our RRSP’s and RESP there. We have a financial advisor at the moment but we have lost confidence in him and are thinking of becoming DIY investors. I would appreciate any comments!

I’ve been with RBC DI for the past 15 years or so… and a DIY investor all my life (since the age of 12)!

As a DIY investors one of your big priorities is to have fees and costs under control. At RBC you’ll have a hard time doing this since there are inactivity fees, under funded fees, fees for this and fees for that… not to mention that doing transactions with them is one of the costliest in Canada.

Also, while I can usually do transfers and transactions with just about all other brokers, with RBC, you’ll be constantly on the phone talking to a representative because that is the way ‘they’ like to do business.

I for one, have been transferring my business away from them and have been splitting it between many other smaller brokers.

With today’s under-performing N.A. market and a growing emerging market, you will owe it to yourself to be able to invest in foreign stocks and funds. Of course you can do this via some funds or ETF, but its not the same. For this reason, you may want to look at HSBC and Interactive Brokers.

If you want to control your transaction costs to the absolute minimum, you’ll want to go with Interactive Brokers or QuestTrade.

I have been reading through many articles on this site and find them to be a great read and highly educational. With that said I have a few questions of my own in regards to Dividend Investments.

I am new to this stock exchange business and I have decided to pursuse a steady stream of income using Dividends. I am looking to trade mostly US since the yield is much better than CAN. I know that I would probably not be doing much trades as this is for a long term investment. I also feel that i would not use DIPS since I am capable of doing it all manually when the time comes. In regards to this my questions that need clarification/explanation/opinions are:
1. What would be the best brokerage that would suite my needs
2. What type of account should i open/look into
3. Any other information that I should know

Mike, if you are investing in US dividends, it’s probably most tax efficient to use an RRSP. If your balance is less than $50k, and want to keep your costs as low as possible, than Questrade is your best bet.

I’m looking to open a TFSA ($5k to start) and wanting to purchase US equities, since I know more about them mainly. Does the TFSA have any upside like the RRSP with regard to FOREX? How do I get hit with fees and what can I expect? I’d prefer to hear from someone who has been there and done it; otherwise I find it hard to sort out the truth.

From what I can tell on this page, there no easy winners with regard to brokerage houses in Canada. Despite their problems, Questrade may still be a better way to go? Is Questrade the same as Qtrade? I use Vanguard in the states and could not ask for a more honest and reliable company to deal with; not to mention price conscious and competitive. I’m trying to find the same here, but Vanguard has no affiliate and no recommendations. Any out there? Tough sledding so far. I have also used Etrade in the states and have been very happy with them. Scotia(now owns itrade) is a bank, however, and well, banks are banks, not places to invest unless you are buying their stock. That’s my opinion in any case.

When exchanging funds in a Questrade TFSA (i.e., converting Canadian dollars to U.S. or vice versa), the spread is 50 pips. For all registered accounts Questrade clients can choose to have their free cash settle in one of three ways: Canadian, U.S., or to hold both currencies simultaneously in the same account. Users can change their preference at any time.

Folks, I often stop by this blog to read experiences others have shared and have learned a lot in the process. Currently I have an account with Questrade for simple trades and so far I have had no issues with them. I am trying to open a TFSA account and at one point in the application form, under spousal information, there is a mandatory field for SIN number of my spouse. I don’t see why this piece of information is relevant, when I am opening a personal TFSA account. Has anyone else had an issue with Questrade asking for this information?

I can confirm that way back in 2007, when I opened my account with them, they also asked for the spousal SIN. I remember because I too found that weird.

Considering that the government FORCES me to merge my tax declarations with my girlfriend now and that banks and insurance companies (I assume this applies to brokerage firms) are allowed to ask for this information, I figured there was no harm in providing it… but I can assure you that my girlfriend didn’t like the idea when I asked her for her SIN number :)

I also have some accounts with Questrade, and recently tried opening a TFSA with them as well. The application asked me, “Do you have a Social Security Number?”, and I said YES (it’s true). Then at the end, the system told me that I have to send in a W-9 form. But that form is only for the use of U.S. citizens or U.S. residents, of which I am neither. After a long chat with Questrade’s customer support, where we went over my past life and exactly how I came to have a Social Security Number, they admitted that their application is simply not able to handle my situation. There is no other way to apply for the account, so I will have to wait for them to alter their application process. No idea how long that will take, I am now thinking of going with TD Waterhouse. Kind of sucks, since I have accounts with Questrade already and it would be nice to have my TFSA there too.

I am very new in trading and just opened my account with Questrade. As fas as I know, to enroll DRIP (I’m considering Scotiabank DRIP), I need to buy initial share and to have my share of scotiabank certified.I asked their two staffs from Live Help about their cost for a share certificate.However, one staff told me it’s free to get share certified and the other staff said that certificate re-registration fee is $300. Now I am confusing that if it’s free or $300?? Please anyone has a share certified through Questrade clarify with this question. Thanks!

I see that the information above has not been updated in some time. I dealt with both Scotia (itrade) & TD for brokerage and RRSP accounts. I finally got fed up getting gouged on trading commissions (having paid up to $300 for one trade).

I ended up researching brokerages and settled on Qtrade which has been an excellent experience. The fee schedule above shows a $50/yr fee for RRSP accounts under $50K. This information is wrong – its $50/yr for RRSP accounts under $15K. Brokerage fees are low and if I call or email, the call gets answered by a PERSON! Emails are responded to in less than a day.

Thanks for the review. I must say that so far (two weeks) into my dealings with Questrade, I have been very disappointed.

Two weeks since the application and funding has been accepted and 10 days since they received signed documentation, only contact I had from them (as a reply to my email asking for update) was an email telling us what we already knew (“we have received your application and it is being processed”). Nothing useful, like, “it will take ___ days to get processed”, or “normally, it takes ___ days to get the account going”… Nothing. It still shows as incomplete application even though everything is received (as they confirmed). No emails with updates, no confirmations that application is still being processed… Nothing.

Well TD Waterhouse has finally introduced “Auto-wash” which will wash all your US trades so you don’t have to call in to do it.

Although the daily, ongoing laborious phone calls won’t have to be made, it still doesn’t make up for not being able to put a stop-loss on Options, or having to call in to put a stop-loss on equities when they are less than 100 shares.

You still have to review all the wash trades to be sure they have been done correctly.

If you buy a Canadian stock on the US markets, they will still convert it to the Canadian version, so when you decide to sell, the exchange box will automatically fill to sell on the Canadian Exchanges. eg sell LULU populates the screen as LLL on the Canadian Exchanges.

I’m in the process of moving my entire retirement account to OptionsXpress which, is almost as good as ThinkorSwim. You can enter a One-Triggers-Other trade so if your trade fills, the stop-loss is placed automatically. I have verified this for equities and options. I haven’t tried other types of trades.

I closed my account at Q-Trade because of the amount of commissions I was paying to them (around $5,000 during the 2008 financial crisis). I opened an account with Questrade and have found them to be the most frustrating broker I’ve ever dealt with in the last 50 years. It took me about a month to convince them that trading options inside a TFSA account was allowed by the Canadian government. I trade index options and when the market moves I can make huge profits.

However, for the sake of saving a few dollars on commissions at Questrade I’m sitting here (August 8th 2011) waiting for them to credit may account with funds that I transferred from my bank account last week. So far I’m out around $50,000 in lost profits while Questrade fumbles through crediting my account with the money I know they have of mine. Today one of their representatives told me on their live chat line that after my account is credited with the funds I will have to wait another 1 to 2 days before placing a trade.
I definitely can’t recommend Questrade. Their attitude toward their clients is terrible and their policies are archaic.

Questrade has these low prices because they are a small shop. If you want transfers to be ‘over-night’ they go with the $30 per trade people. In reality, if it takes 5 days (or even 10 days) instead of 1 or 2 days but I get low rates, I’ll take the first option because moving money is usually a one-time thing!

Reality is that YOUR timing simply sucks! True, this is easy money right now (like back in 2008/2009), but your missing out on it because you decided to transfer money during this time… has nothing to do with their brokerage services.

But anyway, as for your first part of the comment… trading options. I get frustrated with many brokers who refuse to trade options or other fancy transactions in a RRSP or TFSA. Luckily for us there are ETF’s now that you can use to do ‘somewhat’ the same. For example, in the last week I have been trading SPXU, SQQQ, HBU and HZU in my RRSP accounts where normally I’m not set up for options trading. My hedge is as good as options in my opinion (just a lot riskier than options).

Their low commissions don’t come nearly close enough to justify their extremel POOR customer service. They’ve just offerd me a $10.00 commission trading credit because of their admited error in not allowing me access to my account. I figure I’ve lost about $100,000 over the last few days ( Aug 5 to 10, 2011) when the markets are an options traders dream.

Jeach, I don’t have to prove anything to a lightweight like you. Making big profits trading options in an extremely volatile market is not a big deal. What I objected to was the poor customer service and the idiotic problems that exist because Questrade uses two systems, the other one being myquestrade.com. After 5 days, 5 different chat line agents that wasted a total of about 12 hours of my time, I finally found an agent that took the time to discover that my account number had been changed without my knowledge. So 5 days went by in one of the most volatile markets since the fall of 2008 and I was locked out of my Questrade account because my account number had been changed – and nobody thought to tell me. Fortunately I was still able to trade through my Q-Trade account, in spite of the fact their commissions are about 3 times as high as Questrade. JEACH something you’ll never experience is a 3 month stretch (fall of 2008) is where you make $500,000 trading options but have to pay $5,000 in commissions to do so. And that’s why I looked for an online broker with lower commissions. So now I’m looking again for a broker with low commissions and that understands the importance of providing competent service.

This site is nothing but a love in for Questrade and I suspect it’s populated by Questade employees trying to overcome the fact that their company has an unstable trading platform and very poor customer service. The Globe and Mail ranks Questrade far down the list and many of the negatives in their study were around trading and customer service problems – can’t amend an order and often can’t cancel an order in order to re-enter it at an amended price. CUSTOMER SERVICE? -forget it- send them an email message and maybe get a reply 2 days later.

Ok there buddy… first $100K, now $500K… your next post will be $1 million during the weekend?

That’s like saying Bill Gates and Warren Buffet complain because they can’t get quality products and a decent service shopping at Walmart!

You get what you pay for! And I find I get a relatively good deal for (one of) the lowest fees that can be found in Canada! You don’t like it, then constructively post your arguments on this site and hope they will get resolved. But if you make so much cash trading, move on to a competitor and concentrate your efforts on trading rather than posting non-constructive points.

Besides, with the kind of profits you proclaim to be making, you obviously aren’t trading in a TFSA and probably not in a RRSP, so that means you pay capital gains on your earnings… but your commission fees are deducted from your taxable gains so why would you waste your time on Questrade? Not all brokers are made for everyone!

As for your argument that “this site is nothing but a love in for Questrade”… I thought there were more people posting complaints than people defending them (like myself)… so your point definitely doesn’t hold up (again).

Why don’t you trade with big banks? All active traders (like you proclaim) will end up getting the $6 to $9 trades?

Why don’t you trade with Interactive Brokers? They have even cheaper rates than Questrade for active traders, plus you get access to more stock markets than you can deal with. On top of that they credit ECN fees if you add liquidity… can’t beat that!

Questrade so good? I’m not saying that Questrade is the best, nor am I saying they are better than the rest. I’m just a HUGE defender/promoter of brokerages offering great transaction costs and low (or no) fees. Although I have aggressively defended Questrade on this blog, I’m in reality defending any firms that can provide a great alternative to the big bank’s monopolistic strong-hold with un-competitive pricing and fees.

As for your G&M link you have provided… I normally don’t put too much weight on these and usually only look at them to see if there are any new competitors in the market. The reason I don’t like them is because a brokerage firm’s services and products are too vast to actually rate them. Especially that (I would guess) 80% of the common investor/trader only uses about 20% of a brokers services.

But I read your link anyway and as I would have expected, I couldn’t agree with the large majority of their results. How could Questrade which has transaction fees of $4.95 (min) up to a max of $9.99 have a rating of 22 (of 25) and RBC has a rating of 17 when their rates are $29.98? Actually, when I buy ADR’s or some ETF’s (and various other securities), I get charged $39.99 or more. When I ask why, they always have a good excuse! Anyway, don’t you see a ‘red flag’ right there? You’ll probably argue that you can get the $9.99 or $6.99 at the majority of the large banks… and you’d be right! But, it’s virtually impossible to attain and even harder to keep for the common mortal. The average investor does NOT trade to those requirements so for the common big bank client, they WILL pay the $29.98. And that’s on top of the inactivity fees and the low-fund fees and administrative fees and the so many fees the banks charge you, which Questrade does not have! So if I would have rated the ‘Costs’ section, there is no way ANY of the big banks could have gotten higher than a 10 (more like between 7 and 9).

And now let’s take a look at the ‘Trade’ section… wow, RBC got a 16? As I have mentioned earlier, each trader has specific needs, for example, mine would be for Questrade to add European and a few Asian stock markets. But most of you probably don’t care about that. So how could you rate a broker on such different needs? So back to the ‘Trade’ rank… ‘variety of orders’, not that great for RBC, ‘global stock markets’, RBC totally fails there, ‘real-time updates of cash levels and buying power’, that is a total joke, ‘U.S.-dollar RRSPs’, ok, so they may have it now, but do a lot of people really care?, and for the last point… who cares about all of those. My point being is that if Quetrade actually tried to provide this last point, they would have to raise their fees significantly… I don’t want them to have it so that I can keep paying only $4.95.

‘Tools’… now that’s a joke, because if your as big a trader as you say you are, I’m sure you’ll agree that the last thing your going to use is a brokers tools. You go out and use your own tool to do the analysis and research, then you come back and trade with your broker. So did RBC gain a 17 ranking with all of that crap they have added in the last few years? Damn, they probably have over 100 software developers working at an average of $60K per year developing all that crap that RBC has now (which is really buggy by the way). Why don’t they fire all those guys and just provide lower fees (at least that’s what I would need… or even better yet, invest in real servers so that it’s not SO slow trying to buy a simple equity).

Anyway, I’m not going to go through it all… it’s clear as I go on, each section gets more and more ridiculous… You know, back in the 90’s people didn’t buy those TV’s with integrated DVD player and integrated VCR because people wanted their own choice for each. In my opinion, a broker should not have everything (analysis tools, videos, trade simulators, fancy graphics, etc), they should specialize in a few things and do it well.

My recommendation… every single investor/trader should have about 3 (or more) brokers and use them individually according to their strengths.

From my point of view I gave up on full service brokers about 15 years ago and have used online brokers ever since. I learned long ago that to be a success options trader I have to trade online. Athough low commissions are important they should not be the deciding factor and that’s where QUESTRADE has let me down. Yes, they’re cheap but their antiquated trading system has cost me much more than if I’d actually used a full service broker.

You’ve got a good thing going here, however, I wonder how unbiased you’d be if Questrade wasn’t buying an ad at the top of your site?

>> You’ve got a good thing going here, however, I wonder how unbiased you’d be if Questrade wasn’t buying an ad at the top of your site?

Never noticed that before :)

Although if it’s a Google ad of some type, they’ll post whatever their bots seek out from the page, so that’s expected.

But even though Questrade is buying an ad (directly or indirectly), the owner of this blog is getting 100% of the money… none of its many users/contributors… and certainly not me (should I be expecting a contribution royalty check)?

I’m confused. If Warren, or anyone for that matter, is a high volume trader, why wouldn’t he use a full service broker?
I’m paying $7 for equities and ETFs regardless of number of shares or price and $7 plus $1.25 per contract for option trades. It does require and average of 50 trades per month for 3 months to obtain these rates with TD Waterhouse.

Comment 313 did point out some negatives about TDW but you can call at any time and speak to someone knowledgeable. The autowashes come in very handy on my RRSP and TFSA.

DAVID.
My main reason for not using a full service broker is because during ‘fast markets’ you can never rely on getting through to a broker on the telephone to make a trade. And with a good online broker you can see the bid and the offer and you can instantly make changes as the market changes.
Commissions are only a secondary consideration.

There are a few terms being used within this blog which are incorrect. I’ll try to explain a few things, but I may be wrong on some, so please bring corrections as needed.

high volume trader – As far as I can understand, Warren is not a high volume trader but rather a high value trader. If he was a high volume trader, he almost wouldn’t have a choice but to use a trading platform rather than a simple broker. Plus, by law, if you trade too often during the course of a day (I think) or too quickly (buy and sell within minutes), you are labeled as a day-trader. Might sound prestigious, but being labeled as such means that you can no longer get regular customer prices from ANY brokers. For example, to get Level II quotes will cost anyone a couple of dollars… but day-traders by-law must be charged in the hundreds of dollars.

high value trader – This basically means that you do a couple of trades daily or weekly, but the total value is HUGE. Normally, you will not need a trading platform for this since you can comfortably transact online or calling in.

trading platforms – A trading platform differs a lot from a discount brokers general trading tools. Most importantly, they are made to bring up quotes charts with a single touch of a key or mouse click. Most are made to be able to trade also with a single touch of a button or mouse click. Normally you can also program trading algorithms for program trading. And also, you can buy baskets with a single touch. For example, when I was a day-trader for a firm, I would pre-set my volume of shares to 1000 and would also program certain keys to be buy or sell on a specific ECN of my choice. So that at any moment, I could press a key and I could have bought 1K shares of XYZ on the BATS ECN. A few seconds later, another press of a button to sell 1K shares on ARCA. I was expected to do this (buy/sell) about 300 times per day (from 10:00 to 15:00).

full service broker – These guys basically charge high fees to give you advice. They are great if you have a lot of money and little time to manage your money because they really keep an eye on your money for you and constantly keep in touch with you. In Warren’s case, I don’t think this is of any use for him.

Customer service is dreadful. It’s taken me countless phone calls, faxes of documents and a series of stalling tactics by Questrade before they closed my account. They insisted it could only be done by phone (1-855-222-3009). I made two separate calls and it quickly became apparent they only wanted to try to convince me to keep my account open. The agent offered me a bonus(?) if I’d consider staying, He said they were working on new software that should correct their trading problems. He admitted they’ve employed customer service agents that aren’t well trained. Getting my funds returned was even more difficult. They insisted that I provide either a void cheque or a stamped and signed deposit form from my bank, in spite of the fact I had added funds from that same bank account less than 2 weeks previous. After I provided both forms they said my cheque had been rejected because they don’t accept temporary cheques. They apparently expected me to order cheques that would never be used in order to satisfy one more of their anal rules. I reminded them I had also provided a stamped and signed deposit slip and they quickly backed off.

They offer cheap commissions but in my opinion their poor service and trading problems are far more expensive in the long run. It seems Questrade is a company with a trading system that is archaic and has become mired down in bureaucratic nonsense by a management that doesn’t know how to solve its problems.

SMDI and BNS are going to lose all of my business for $100 admin fee on one account that does not have the min balance even though the other investment accounts, surpass the min balances significantly. The $100 is less than .005% of my total assets with them so its not about not affording it, but the principle of having all my business with them you would think they would be some sort of consideration. I am already paying the higher trade amount on the per trade than many other brokerages. Shocked at the incompetence.

Talk about not seeing the forest and staring at the tree! Oh, and I have been an account holder for over 20 years with BNS and 11 yrs with SMDI.

I’m not sure who SMDI is suppose to be, but I’m guessing that BNS is the Bank of Nova Scotia”?

If so, you may be in luck because they have branches everywhere and I would recommend you walk into one. It doesn’t have to be the financial division either.

Many, many years ago, I had issues at RBC in my trading account similar to what you are describing. So I walked into my RBC branch and demanded that I talk to a person authorized to take decisions (normally you have to talk to lower people, they saw that I was furious… but respectful). I ended up talking to the bank manager. Not only was she able to waive these fees, she ended up giving me a bunch of advantages also (lowering my margin account to prime + 1, free safety deposit box, etc).

These people that you usually call at some help desk have almost no power and also are not mandated to think for themselves. If it says you owe $100 in fees, there is no arguing with them. But a bank manager will recognize your business value and can change things.

One brokerage that seems to be missing from the list is Options Express – http://www.optionsxpress.ca They offer Canadian RSP & TFSA accounts. I think that there’s some regulation that only allows those types of accounts to do covered calls – so not the whole slate of options trading. I don’t think that this is just limited to Options Express – might be a regulatory rule. They have a commission rate scale, but it’s generally about 14.95/trade I do my RSP & TFSA trading with them, and non registered account trading with ToS

If you’re thinking about signing up for Options Express, send me a note (totorofurball@gmail.com). If I refer you, we can both get $100

Some US online services let you write Cash-Secured Puts as covered puts and therefore at a level 1 or level 2 options trading permission level.

I was wondering if there is a Canadian online brokerage that does the same.
I would rather not have the added complication of maintaining a short position on the stock in order to write a put when I either want to just collect premiums or I want to actually buy the stock.

337. New To Options: I just checked with OptionsXpress Canada and they told me I can trade Cash-Secured Puts in my RRSP account. I had been meaning to ask them for some time and your question prompted me to do so. Will try that this afternoon. :)

@Trizi – Please post your results here or PM me. It would be useful to also detail what level of permission and whether you have to do anything special to apply for those permissions, or whether they automatically give it to you.

Can someone reccommend an online brokerage in Canada that offers OCO orders? Really wish Tradestation was available here but they won’t come up to Canada with all the regulations. I am using Tradefreedom but their order offerings are woeful. No OCO orders so you have to be glued to your screen all day.

339. New To Options
I finally had a setup that I wanted for a Cash Secured Put and the system wouldn’t let me enter it.

I checked again, this time with the trade desk and a Cash Secured Put requires a Level 2 authorization for US retirement accounts. I have a level 2 authorization but it is modified for RRSP’s. Canadian regulations are the culprit.

Hi:
I noticed that on your chart TDW is listed as ‘Yes’ in the DRIP column. When I called them they said dividends will only be reinvested if their value equals or exceeds the cost of a share. For example one would have to earn $75 in dividends for them to purchase one $75 share. So they will not purchase partial shares. Is this your understanding too? Thanks!

@CJ, Yes that’s called synthetic DRIP which all discount brokers offer. That is, you need enough in dividend distribution to cover at least 1 share of the underlying stock. If you want partial shares, you’ll need to do some research into SPP. As well, some ETFs allow partial shares as well on DRIP.

“¶ 23. The writing of a naked call option, whereby a plan trust sells a call option in respect of an underlying property which it does not own, may result in the plan trust being considered to be carrying on a business. The same result may arise where a plan trust engages in a short sale, i.e., the plan trust sells property that it does not own. An RESP that is carrying on a business is revocable. An RRSP or a RRIF will be liable for income tax on its taxable income for any year in which it is carrying on a business.”

In summary, it says that you can’t hold a naked call or a short sale in your RRSP, RRIF or RESP.

“Prohibited investment: This is an investment to which the TFSA holder is closely connected. It includes: a debt of the holder;… ”

“Qualified investment: Common types of qualified investments includes: money, Guaranteed Investment Certificates (GICs), government and corporate bonds, mutual funds, and securities listed on a designated stock exchange. The types of investments that qualify for TFSAs are generally similar to those that qualify for registered retirement savings plans (RRSPs).
“

Section 14.E, IB Canada Customer Agreement: ” IB has the right, …, to liquidate all or any part of Customer’s positions in any of customer’s IB accounts” And they do it even to your cash account with a very short notice. It’s a pretty bad practice nowadays.

I am looking for an on line brokerage that will allow me to trade the Toronto stock exchange. Costs are important and this table helps. It does not tell me if the company offers street-name ownership or registry or direct ownership. How do I find this information? i am concerned about the risks of brokerage insolvency and street-name ownership.
Any information would help. Also info about share registry options in Canada.

“i am concerned about the risks of brokerage insolvency and street-name ownership.”

I’m not exactly sure what you mean by all of that, but if a ‘broker’ becomes insolvent, it is quite different than a bank. At a bank, you will lose all monies greater than what the government protects. But at a broker, you own the title to your securities, so it can go broke all it wants, those titles still belong to you and would get transferred to whomever would take over.

I use scotiaitrade formerly tradefreedom since 2006 and it is horrible service and they still havent reversed the fees they illegally charged me. I been out for 2 weeks now as they promise to call me back to fix a technical issue with my platform.
I been promised a callback everyday now and they just dont return calls or try to resolve issues. Tradefreedom was great, Scotiaitrade is incredibly horrible

I am with TDW Canada. As of today they charge $29 per transaction. If a sell or buy order is split into multiple transactions within the same business day, the transaction fee is still $29. You can prevent it with a different type of order if you need. If the stock price is below $2, the transaction fee is 1.5%. They allow trading any kind of stock, including penny stocks. If there is an additional transaction fee, let’s say for OTC, the order has to be confirmed over the phone. Only buy order. No confirmation is required for sell. If an order is required to be confirmed over the phone, in some cases, such as buying a lot of shares, you can set your order in such a way that it will never be executed. Later you can modify your order the way you like it on line without calling them or cancel it, also on line.
Customer support is available 24/7. Once I called them at night during a holiday, and I got all I needed without any problem. I would qualify their customer support as very good one. Never had a problem. I do call them a lot.
I don’t pay any transaction fees in my RRSP account when buying qualified mutual funds. DRIP is also free.
My TFSA account is also bound to stocks. As of now they have auto washing for US dollars. It means that you don’t have to call them anymore for every trade in US dollars to do that. You just need to call once and sign for it.
Opening an account took me 1 hour. Even so that I was told that my account would be activated after approval for the next business day, it was active as soon as I got home.
I have all possible trading accounts with them. No fees for inactivity or minimum balances. If you sing for e-services, there will be no fee for maintaining your orders history.
If you have other business with them, such as a checking account, loans, mortgage…, you might be qualified for a flat rate with much less money in your trading account. In my case I need only $25K.
You can say that $29 is kind a lot for a transaction but it is not really like that. First of all, if you invest for a long time, $29 is nothing. If you are a day trade or a short term holder, you should not trade if your profit is expected to be less than a few hundreds dollars.
If you have other business with them, you might save much more money with your mortgage, for example. I have a lot of business with them and as a result my mortgage is only 2.1%. And it was as low as 0.8%. I pay a little more for my stock trading but I save thousands of dollars in other places with them.
I have very little left to fulfill their requirement and have $25K in my trading accounts to be qualified for a flat rate without having 30 trades per Q. You need to call them and ask for your options for your trading account. You might be surprised to find out that there much more than a general description on their web site.
The orders are executed instantaneously. The orders can be modified or canceled before they are filled. The set of different type of orders is more than enough for basic trading.
I use other online applications for L2 support and life charts with all the tools I need. It works for me better and actually cheaper so far unless I become a full day trader. Then having another broker and custom trading application might be my next choice.

My advice, don’t rush switching a broker only because somebody is cheaper. Stay with your bank unless you want to become a full day trader. Then it would be a different story and different requirements and your bank definitely wouldn’t be the best choice. Unless then having everything in one place even it is a little more expensive, still gives you a lot of advantages that you might not have with an independent discount brokerage.

thanks for your helpful comparisons. There are a couple of things I didn’t see compared.
1. Are shares purchased through the brokerage owned directly by clients (direct registration), or are they held by the firm in the client’s name (i.e. clients are unsecured creditors)?

2. Do the brokerages engage in hypothecation and re-hypothecation of the clients assets, if so what are their policies in this regard?

I am a foreigner looking for a brokerage where I can trade the Canadian stock exchange in the name of a trust. Any information you can help with would be most appreciated.

Thanks for the comparison tables, very helpful. Reading all these comments was very entertaining too. I would hate to do customer service for any of these brokerages; if the comments are any indication, there are a lot of customers with little money and even less knowledge expecting the world from their discount broker.

I’m currently with Credential Direct and I’ve been treated well by them so I’m loathe to move. If they would just allow USD cash inside reg accounts I’d be 99% happy for my trading style.

Hi there,
Just today I made some USD stock purchase using Questrade in an RSP account. Questrade said that the FX spread is 1.99%. I asked Questrade whether they are charging 2% commission for currency exchange. They said yes.
I was a bit uncomfortable thinking whether I am looking 2% capital/equity right from the purchase. Is it correct that I lost 2%?

Any thoughts or suggestion on how I can save some money here. Should I purchase some USD and deposit in Questrade?

I started out with TradeFreedom and was happy there. Then when Scotia iTrade took over, it kept getting worse. Most recently I got this email regarding my TFSA:

• If you hold an RESP account with Scotia iTRADE, you need to have $15,000 or greater in combined assets with Scotia iTRADE to avoid a $25 annual fee (plus HST) charged to your RESP account(s) on September 15th.
• For registered accounts, other than RESP accounts, you need to have $25,000 or greater in combined assets with Scotia iTRADE to avoid a $100 annual fee (plus HST) charged to your registered account(s) on September 15th.

So, TFSA with combined iTrade assets < $25,000 = $100 annual fee! I sold ~half my holdings to buy a house and am now under this threshhold…time to find a new broker!!

So I emailed them back looking for clarification….and they replied that the TFSA is exempt from that policy and apologized for the confusion. Its still `no fee and no minimum balance`.

Though as a side note, switching your accounts out of iTrade is still prob a really great move. Their commissions are no longer competitive and they`ve now taken away everything that attracted me to them in the first place. About the only thing that`s left is their no commission mutual fund policy. But its only a matter of time before that goes too….

Feedback Enhancement requests:
1) In addition to the feedback number and person’s name, could you add the date that the feedback was entered? (This could be in a smaller font besides the person’s name)
2) Could you list the feedback, or provide an option to list the feedback in descending order, so that we could read the most recent first?

Two more $7 commission options
Please update your table to include HSBC which offers a $7 ($6.99) transaction fee with a minimum of $100k in assets, and TDW which offers a flat transaction fee of $7 for high volume traders. You must make a minimum of 150 trades per quarter (about 50 per month) to be eligible for this rate. But they still have $9.99 commission rate as long as you have sufficient assets with them.

In general, NO ONE should pay more than $10 per transaction if they have a mortgage, line-of-credit, or RRSP plus RESP plus stocks plus TFSA exceeding $100,000.

I used to be with iTrade now after they increased the trading platform again from $31.45 to $70 or $100 depending how often you trade, I finally switched to VB. I did a lot of research and find them to be the best priced online trading firm in Canada. iTrade is your typical Canadian bank which nickel and dimes you to death.

Beware – Avoid Questrade.com – How Questrade online brokerage unscrupulously stole money from an investor even though the application has been canceled and the applicant has not performed a single trade.

** , you are their superior at Questrade and you have the power to make a change. What will you do about this situation? **

Disclosure: I do not act as an agent or work for any brokerage service. I am not affiliated with any Questrade competitor. I do not profit from the posts.

If you don’t have the time to read what follows, do yourself a huge favor by avoiding Questrade discount stock broker (Questrade.com) at all costs, because it’s the only sure way to avoid being one of it’s many victims.

After reviewing multiple documents including financial, communication, phone, chat, e-mail and listening to pointless phone conversations with Questrade, I just could not believe what is happening and neither could the bank managers being ignored by Questrade while trying to recall the funds. No one who has been made aware of this situation thinks that it’s acceptable, except of course for Questrade.com who still refuse to return money which doesn’t belong to them no matter who legally asks for it.

Since the investor has been extremely patient and wasted hours trying in vain to reason with Questrade, who flat out refuse to return funds that they have decided to keep since may 2012, I’ve taken upon myself to publish this story and pass on the information to my colleagues, including one who works for a TV Station, to help recover the money from Questrade and help others being cheated by Questrade.

So many try to talk to Questrade in private or file official complaints with the regulators, hoping they will do the right thing, without any results. Going to Questrade’s offices with a TV crew might be what it takes to get the funds back.

My best advice to anyone having serious issues with Questrade is to file official complaints with the regulators and then contact a good lawyer and your local media, because the regulators will not help you.

What are the regulators doing about Questrade? Absolutely nothing. Current regulation doesn’t prevent their unprofessional, unethical, dishonest and unlawful behavior. Questrade function with near total impunity.

It’s easy to understand why Questrade is “not BBB Accredited” (The Better Business Bureau) and went from a failing “F grade from BBB”, which is the lowest rating an online business can get on a scale of A+ to F, to “No Rating”.

This is only a partial account of the investor’s personal ongoing negative experience with Questrade, which has been thoroughly documented and is backed by hard evidence:

– I was looking for an online broker. After reading so many beautiful and glorifying reviews about questrade.com along with a few complaints and talking to a Questrade rep, I decided to try their service. My personal experience is in sharp contrast with those reviews and closer to the bad experiences of the other customers.

– Questrade is the most unprofessional, unethical, unpleasant and dishonest company I have dealt with.

– Questrade took my cash deposit $XX,XXX.00 and refuse to return it. I’ve encountered a barrage of incompetence and deception trying to recover my funds. My Bank also has been trying to get my money back and Questrade have been ignoring my Bank’s requests.

– I was in the process of applying for an individual margin and individual TFSA account. I confirmed with Questrade that I would be able to transfer funds from and to my bank account since the bank verification is complete, validated, accepted and I have a void cheque and valid ID on file with them.

– I’ve been able to successfully transfer funds from my bank account using bill payment and back to my bank account using EFT (Electronic Funds Transfer) and I was looking forward to completing my application and using their service.

– I lost all confidence in Questrade because of multiple issues with the company, including them losing my documents then laughing out loud about it and having to wait between 1 hour to 1h50min to talk to the most incompetent, unprofessional, rude, unresponsive, unfriendly customer service reps who have no clue what they are doing and are always rushing to get rid of their customers.

– Since Questrade gave me the impression that I was dealing with a shoestring operation being ran in a basement as a hobby and that things would only get worse, I decided to get my money out. I was able to return, using EFT, part of my funds back to the same bank account that was originally used to send money to Questrade using bill payment.

– They’ve offered 5 free trades to make everything magically better, but I couldn’t ignore the facts. I kept my decision to grab my money and keep running before it’s too late. All I want is for them to return my money and close my file, but they decided that my money was better off in their pockets.

– Without any warning or any kind of communication, they’ve frozen all my funds since the month of may 2012 and refuse to return my money where it came from. Even though I’ve advised them that I do not wish to be their customer and canceled my application, I’ve been told by various Questrade employees that I have no other choice and the “ONLY” way they will “CONSIDER” transferring my funds back to my bank account is for me to “complete the account opening process”.

– My application is currently canceled. Instead of simply returning my money, they want to force me to open accounts I don’t want, deal with a company I want to avoid like the plague and then spend hours on the phone trying to close the accounts hoping that they will return my money, so they can easily charge me up to $250 in additional closing fees, which has happened to others trying to close their accounts.

– According to the Questrade customer service representatives, I absolutely have to go through the whole account opening process and I “need a notarized valid ID to verify that we send the funds into the correct account”. Please keep in mind that this is the same bank account which all the Questrade customer service representatives agree is verified and they’ve all confirmed that it’s the one and only account from which Questrade originally received my money, using bill payment, and that it’s the same account that I’ve used to recover part of my funds using EFT.

– All conversations with Questrade employees always start with:
“This is strange. I don’t see why you can’t transfer your funds.”
“I can see that the bank verification is complete. You should be able to transfer your funds.”
“There’s no problem with the void cheque you have on file.”
“I can confirm that you made multiple transfers to your bank account.”

– When they can’t think of anything else to say, they tell you:
“I understand your frustration. I know it doesn’t make sense, but that’s just how it is.”
“There’s nothing I can do.”
“If you are not satisfied, then escalate.”

– Questrade employees make up all kinds of rules and absurd excuses as they go along, ignore common sense, disregard the law, routinely contradict themselves and flat out refuse to help the customer. I’ve been told that their “back office made the decision” and that “this situation is currently out of our hands”. When I ask to talk to their “back office”, I am told: “Unfortunately you cannot contact our back office”. They also refuse to put a supervisor or manager on the line. They do not care about their current or future clients.

– Questrade state clearly in writing:
“NOTE: If you discard this application you will lose all information that has been entered. If you made an online bill payment or you paid by cheque, the amount will be refunded to you.”

– Yet they refuse to honor their own statement, close my file and transfer my funds back to my bank account. They are also ignoring my financial institution’s requests to return my funds to my account.

– From my experience, Questrade is deliberately misleading, taking advantage of people and is the perfect place to get ripped off .

– People shouldn’t believe anything written on Questrade.com or in their documents, because their statements are meaningless, since they can say or write anything they want and not be held accountable by anyone including the supposedly regulators.

– It’s only the illusion of low commissions. It’s not worth it if they take your money and refuse to give it back, you cannot get in touch with a customer service rep or when you want to file a complaint they give you the runaround and will refuse to let you speak with a manager or supervisor.

– There is no substitute for good service.

– I wonder how many free trades Questrade is funding with my money and how many people will actually get their money back. Questrade is making money with my money and making a fool out everyone.
…

This is not the only person being deceived, cheated and abused by Questrade. Please do a quick online search to find all the horrible experiences and the negative comments from their current and former customers.

I have done a great deal of research and according to the multiple official complaints and blog posts, “Questrade is a dreadful company” would be an understatement.

Judging from the information that I’ve gathered, all those posts warning people to “STAY FAR AWAY from Questrade” in all kinds of colorful language seem 100% correct.

It’s up to you to decide if you believe all those reviews praising Questrade.com or all the “Questrade is a wonderfully great company. I’ve been with them for X years and everything is perfect.” posted by the paid Questrade trolls. There are, of course, a few lucky exceptions, but it won’t take long to notice that most of those reviews have referral links and the authors are being rewarded by Questrade. Some Questrade reviewers have also been duped.

If you disregard all the terrible experiences so many have had with Questrade and decide to trust them with your hard earned money, remember that you could be the next person with a sad story to tell, even if you don’t make a single trade.

Can anyone trust a company who lies, deceives, cheats and steals your hard earned money?

Think about all that you risk loosing, if a bully decides to steal your money and refuses to give it back. What would you do, if you were in a similar situation?

Since Questrade will arbitrarily keep your money when you cancel your application, the following Questrade statement is completely false, a blatant lie and very misleading:
“NOTE: If you discard this application you will lose all information that has been entered. If you made an online bill payment or you paid by cheque, the amount will be refunded to you.”

Questrade will not refund your deposit. Questrade will do as they please with your money.

** Questrade, be wise and fully return the funds. Honor what you have put in writing. No one likes a bully, liar or a thief. No one is above the law. **

** you are their superior at Questrade and you have the power to make a change. What will you do about this situation? **

No matter who you decide to do business with, do your due diligence and keep records.

If you’re just buying/selling stocks, RBC Invest Direct should be fine for you. If you’re into any option strategies apart from a covered call, forget about it. I opened an account there thinking about opening short positions on specific options, and they wouldn’t allow it. Unless you own the underlying security, they wouldn’t let me short an option, even if I owned an option at a lower strike price was using the short as a hedge to lower my cost. I just shook my head, closed the account, and stayed with my account at TDW.

Thank you Paul for the feed back. It is good to know about this. Fortunately for me, I do not trade options. This account with RBC would be for my registered accounts. I really hate forced currency conversions and washing up trades is something I feel I should not have to do. Besides the fee at Scotia Itrade of 30 dollars per quarter for a US friendly accounts is insane and they don’t even let you keep the US dollars on the sale side even with this US dollar friendly accounts. For options, if your account is Non Registered, should try Interactive Brokers. Fees are low and their platform is very powerful

Thanks for the tip re:Interactive Brokers as well. I don’t pay any extra for having a US side of my margin account at TDW…..interesting about iTrade. If it’s just registered portfolios going into RBC, that shouldn’t pose an issue. My registered at TDW I hardly touch, I just let it do it’s thing, and keep an eye on everything from time to time…….

“Depending on the total equity from all your accounts, the foreign exchange spread applied to the conversion is as follows:

For clients with total account equity of less than $100,000, the default spread is 199 pips for both margin and registered accounts.
For clients with total account equity of more than $100,000, the default spread is 170 pips for margin accounts and 100 pips for registered accounts.”

I agree, it would be great to have Questrade updated to 1.99% currency conversion. That was quite a shock I received when I converted a small chunk of cash. I’ve got a bigger chunk to convert now… has anyone done any journaling using Norbert’s Gambit with Questrade? Any recommendations on an ideal stock?

1) What drove me out completely, was that during a slow quarter, where I had left just above the required minimum amount 300$ , they stole a $20 dollar incactivity fee from my account, without even notifying me. They refused to refund me on the spot.

2) I was never able to get a hold of a customer service person in a timely manner. It was always a circus to get to talk a person at Questrade.

I have moved my business to BMO Investorline. I would rather pay 10 bucks per trade, now that my play money has passed 50k, and never deal with Questrade again. At least now, I get through to a customer service person any time I need to.

I moved my acct from questrade after their mobile app failed several times. Their response was to use the web instead which is impossible for me as I don’t have access to a computer during the day. I don’t understand how questrade is still in business. I suppose they are the Walmart of retail with their prices but you definitely get what you pay for.

Beware!!! Commissions at Questrade. They’ll rip you off severely. Their 9.95 trade is nothing but a deception. Recently, I paid 57.00 commission for a trade of 5000 shares. They’re always charging you ECN fees. So, in order to avoid ECN I was told to go less than the ask price and sure enough they got me again. Because I said GTC they filled it in 3 separate orders. They never ever tell you the total cost before you place the order or how they are going to fill it. Ever since I joined and because of the “million dollar journery” endorsement; I say beware, beware beware of their cost structure. And one more note; if you’re going to invest in the USA exchanges; Questrade knows all the tricks to charge you extra and so you better learn how Questrade operates and their bookkeeping methods – once again: deception.
I really don’t know what they mean by a $9.95 transaction. It should be $9.95 plus extras which they will tell you about after the trade if you ask them and complain.

I keep my RSP and TFSA accts at RBC Direct. Having the option to hold in Cdn or USD (>90% USD for me) without getting hit on fx every time is one of my #1 criteria. I’ve been a RBC customer for over 20 years so kinda lucked out and had no idea other big bank disc brokerages don’t have this option without fees. $6.95 any size commis is nice too for me (higher vol trader).

I recently opened an account with CIBC Investor’s Edge and bought a some US ETFs. On each of the 4 transactions across a few days, I was only charged between 8 and 12 pips above the Bank of Canada closing rate for USD. This works out to just over 0.1% for currency conversion fee.

I have roughly 50% US stocks within my RRSP but don’t wish to deal with a $USD account. The forex charges appear to be almost non-existent with “CIBC investors Edge” when compared to the others. Unless I’m missing something it would appear to be a no brainer to switch over to CIBC from my present BMO discount broker.

Hi great articel and information: Any advice for a Canadian looking for a brokerage account that is currently non-resident living overseas for the next couple years? Do I have limitations? Am I better off getting a US based brokerage account or a Canadian based brokerage account? I am probably looking at buying a mix if both US and Canadian stocks, probably not Mutual Funds, as I belive I may not be able to, being non-resident? Thank for any advice or pointers.

In my search for my first discount brokerage Google often leads me back to this page. It’s hard to make a decision when the article and the comments seem to be in conflict. Elsewhere Globe and Mail ranks Virtual Brokers as a good option. But here I read there are customer service issues with both Questrade and Virtual Brokers. Perhaps, I am worrying about nothing and everything will be fine or perhaps not.

My primary bank is TD with which I have TFSA – e-series account. I also have an RRSP with them which currently has mutual funds but that too I am thinking to convert into an e-series account.

There are comments here about TD but they are back from 2012. Have things changed since then apart from some fee structure changes they did earlier this year.

AS – I’ve tried many online brokers over the last few years and here’s my ranking from best to worst:

1. Questrade (Still have an account with them)
2. BMO InvestorLine (Still have an account with them)
3. Interactive Brokers (Still have an account with them – best for day trading)
4. OptionsExpress (they closed their Canadian division)
5. TD
7. Desjardins Disnat
8. National Bank (some time ago so they may have improved)
9. HSBC Investdirect
10. Virtual Brokers (By far the worst experience I have ever had with a broker. Several months to respond, borderline of being thiefs. Despite a good rating on Globe, I would never recommend them to anyone…)

I have found a nice test for the qualification of the stock broker. Ask them about form V2A (Non-Resident Form V2A from Irish Revenue Agency). Briefly, this is an equivalent of famous W8-BEN but for the Irish-based companies, like Seagate Technologies for example. How many brokers know about its existence? I have just tested the downtown branch of TD Waterhouse. Zero knowledge. Even when I insisted. Until I forced the guy ;) to read few short sentences from the document I have brought to his office. With this form filled you can avoid 20% withholding tax on STX.

I am going to try this test with IB (as I am moving some stuff from TDW to IB now) to see where they stand ;)

Commenting on my own post. TD Waterhouse at least has accepted the information about he form and promised to deal with it if I fill it up properly. InteractiveBrokers has refused to honour the form even if I fill it up myself. They just say “no we won’t do that”. I am wondering if they are legally obliged to honour the requests from the transfer agent.

While by itself it is not really that big of an issue (V2A, foreign tax, we can offset it when filing the tax return) it looks like it opens an interesting issue. IB told me that they are, essentially, US broker and, even when it is about the Canadian customers they are still considered US entity. I think this creates some interesting consequences – especially when you have anything significant on the account. I may be wrong but I remember reading something about the definition of “foreign property” by Canadian Revenue Agency and how it is different if you have, say, US stocks with a Canadian broker vs. US broker. Maybe I am wrong but I think some more research is needed.

Just got an note from TD Waterhouse (AKA TD Direct Investment) – they are going to (finally) properly implement USD support for RSP/TFSA in November. Good. Trade washing, even automatic, was very annoying and did not work for everything. Not to mention that it was difficult to track and verify.

I am curious what is the maximum amount someone can margin with Mutual funds. For example if I had 10 million dollars could I margin another 10 million? Or would I have to open multiple accounts due to margin limits ie. I think TD has a 750K max for margining mutual funds

Questrade is in general a good system but as a day trader I had nightmares with them. First time their systems crashed I lost about 2000$ but the second time is when I decided to leave. They crashed for about 4 hours on Monday morning December 1s, 2014. I was playing risky oil stocks of which I had to sell that morning at 9:30 as oil was going down…long story short I started the day with an account of 25500 on margin, was trying to sell at 24500 in the safe zone but was unable to. I was trying to make a phone trade to liquidate my whole account and was kept on the line for 2 full hours until it got cut. I was chatting with them on live chat as well begging them to liquidate my account and all the guy said was to call in and they will fix it as soon as possible. I watched my margin account go all the way to 12000$ which is when they fixed the problem. Long story short if you are a day trader I do not recommend them whatsoever. They can be as good as they sound but their systems do bug and you are left to suffer the consequences. My first name is Mehdi and im sure they can find me in their systems and double check my story as it is true! They did nothing when I was losing 3000$ an hour!

No more account fees for CAD accounts (except for $25/year CAD RESP fee). Inactivity fee is $24.95 per quarter if no trades are made and total assets are less than $5000 (it is refunded if a trade is made in the next quarter though).

The fact that Interactive Brokers now offers RRSP and TFSA accounts makes it a no brainier for me. I have used them for my non-registered accounts for several years and the savings on commissions, forex and other fees is amazing. Last year with Questrade I paid over $2250 in commissions in my RRSP. I calculated the same trades with IB and it would have come to just under $450. That is a savings of about $1800!

I am now switching all my accounts to IB. They do not offer RESPs unfortunately. If you trade options the savings are even larger as IB does not charge for option assignments whereas Questrade charges $24. On small trades that can eat all your profits.

It would be good to add another metric – “average wait time on the phone”. Looks like it will be more important this year. I have just learned that I can no longer sell DSC mutual fund units online (with TD Waterhouse) because of new IIROC regulation. Cannot really argue about the usefulness of the regulation – now the broker has to tell you the exact commission for your trade, not just put a disclaimer that “some fees may apply…”. So, apparently, they have to call the MF company, confirm everything with them and get back to you with the exact numbers!

IB offers RRSP and TFSA?????!??!! #@$@(*$(*@# Oh my, how did I miss it? It is not April 1st but I do see it now in their FAQ. Hmmm….Somehow I have a feeling that I will be transferring more accounts from TD Waterhouse this year. Thanks for the tip!

WOW IB offering TFSA/RRSP is HUGE. I just made the mistake of opening and funding my TFSA for 2015…will definitely be closing everything and moving over. As an options trader, I’ve been with them for 2+ years now, great execution. No more scams from the BIG5

I spoke with IB CS and apparently we have to submit 3 separate applications (causing us to buy 3 separate data feeds/charged $10 monthly) rather than one consolidated account. Anyone have any experience linking them together?

I am sure you know that, but just in case…do not “close” it, transfer it. If you close your TFSA and withdraw the funds, then you get your contribution room back only next year. Better do account transfer instead.

And, yes, they charge $10 inactivity fee per account. Plus $50/year. But you know what? I took my statements from TDW for two last years and laid down all commissions I paid them in each year. I ended up with pretty large numbers. I tried to calculate how much would I pay to IB and even my most pessimistic scenario was still interesting in terms of savings. Since you do options you will understand…just the assignment fee with TDW is $43.

Thanks for the heads up – I plan to leave some of my TFSA at questrade since its free ETF purchases and does nicely for a passive portfolio.

I’m already an IB Customer, I’m trying to get around the fact I have to pay for TWO data feeds and be charged commission on TWO accounts from their $10 minimum policy. I’m not sure if its avoidable if we can just open TFSA and then link it under your current IB?

the $50/annual fee looks like it is only applied to RSP and not TFSA.

I’ve created a support ticket with IB hope they get back to me soon, I was close to funding TDW. Yikes!

Starting tonight 6:00 PM EST you will be able to open linked TFSA account directly from you account management. You will be able to do this under Manage Account > Add or Link Accounts > Create Linked Account. Make sure to select the TFSA account type.

To be fair, I would not call TDW “total scam”. I have been using them for a while and while I did have a few issues, most of them were resolved to my satisfaction – including the one that did cost them $$$. However, I am tired of their inflexibility, lousy reports (I had to write quite a bit of code to be able to extract the data I needed for taxes). And on top of that – very high fees sometimes discouraging me from doing relatively small but still profitable trades.

And thanks for correcting me – it does seem like there is no fee for TFSA. I was confused by the fact that they often mention RSP and TFSA together.

However, I did some more checking and found a few serious disadvantages of new IB accounts.

1. “IB only allows funding of RSP and TFSA accounts in Canadian Dollars”. This sucks because in the past I was able to move USD to RRSP and TFSA without incurring any extra fees. Essentially, I was telling the broker how much CAD I want to transfer and they would tell me how much will it be in USD. And the transfer was done using money-market mutual fund, in kind. I am sure it would be possible to find some kind of CAD-denominated USD ETF but there is item number 2.

2. “IBC does not accommodate asset swaps or transfers in kind (cash or securities) from a cash or margin account at IBC or elsewhere to an IBC RRSP or TFSA account at this time”. I think this is a serious disadvantage. I have been doing in-kind transfers to my registered account in the past (yes, I know about the deemed disposition ;) ). This is particularly important for US securities. With these two limitations if I have free USD and I want to contribute to my RRSP/TFSA and buy some US securities I will need to exchange the currency twice! And if I already have the security in margin account – pay two commissions.

3. A bit unclear if IBC actually allows US securities in RSP and TFSA. They do not seem to say they do not but I am going to confirm with them.

Forgive my opinion, I’ve been charged exorbitant fees from TDW and may have a slight biased opinion toward them :)

Thanks for checking additional details – would definitely like to know if US securities can be held.

While I hope these comments help future readers which brokerage to pick – I would like to add that I tried opening the TFSA today under account management but it appears you need a beneficiary designated before you can proceed. The only options on the drop down are spouse/common law, child or grandchild (and their SIN). For someone who is single in their early 20’s without children…not sure how I’m able to open one.

There is something good to say about almost every broker, I think. With TDW I could relatively easily grow my RSPs initially with TD e-series funds. Considering that their MERs are reasonable and transactions are free it was a good alternative to index ETFs. Well, in fact these are index ETFs that have appeared later as an alternative ;) IB does not offer MFs. This means that some investment strategies (like cost-averaging or reinvestment of relatively small amounts of dividends) are not possible or have to be done differently. For RSPs it is important because they are long-term investments and you can’t easily add more funds there even if you have free cash – you are bound to your contribution limits…

Interesting thing about the mandatory beneficiary….I would not have this issue ;) but if it is a blocker for the application – I think this is due to IBC’s limited experience with these accounts. I know for sure it is not mandatory.

By the way, I have asked a bunch of questions about USD and in-kind transfers, waiting for the response on my ticket. Will relay the answers here once I get them.

There is one more thing that surprises me at IBC – they seem to be limiting the number of sub-accounts under family advisor account to 5. Again, waiting for clarification from them. Maybe I misunderstand the meaning of the sub-account. I think a typical family will have 2 cash/margin accounts, two TFSAs, two RRSPs and, possibly a spousal RRSP. Skipping RESP because IB does not support them. So, that makes 6 or 7 accounts. It would be silly if I can only have 5 out of them.

So I have exchanged a few messages with IBC support and found the answers to my questions. Basically, I was trying to assess what will I lose or gain if I move all my family’s accounts to IB from TDW – except RESP that they do not support. Personally I am not entirely happy about the answers.

– first, they charge inactivity fee of $10/month for family advisor account, which is an “umbrella” account for the family accounts. This is a nominal account, there is no activity happening there, but they still increase your total commission “minimum” by $10 for that. When I asked “why” I was told “IB has simply decided”.
– They do allow people to have one RRSP AND one spousal RRSP, not either one or another (a bit unclear on their website)
– US securities are allowed and the funds (dividends, for example) are not converted automatically to CAD
– interestingly enough, they allow you buying puts in RSP/TFSA only as protective ones, i.e. if covered. I may be wrong but I believe my current broker allows me to buy long puts.
– no way to contribute USD to RSP/TFSA. I consider it as a major issue even if you do not receive any income in USD. Sometimes I get bonus paid with company stock + we have stock purchase plan. I often send these shares or USD proceeds to registered accounts. Plus, you may simply want to move a stock you own that is hovering around your ACB to TFSA in the beginning of the year…no way to do it with IB and I was told that it is not something they consider for near future
– they currently limit the advisor account to 5 sub-accounts. That means you cannot have all your family accounts under it (2 cash/margin, 2 TFSA, 2-3 RRSPs). But I was told that because of the recent introduction of new account types this is something they will change soon.

So…some food for thoughts. My biggest concern is really the lack of way to move USD to these accounts.

Family advisor account seems to be a special case – when someone wants to legally manage the account(s) for close family members.

Yes, each account with less than $100K balance has inactivity fee of $10. So, say, 5 accounts below $100K make it $50/month. But I was told that this inactivity fee is assessed for the entire set of accounts. E.g. if in this example you will generate $48 in commissions on only one of these 5 accounts and $0 on 4 remaining ones, then you will be charged only $50-$48=$2, not $40. At least this is the way I understood IBC’s explanations.

I have been with BMO Investorline for over 15 years. In the past year their service deteriorated to the level on totally unacceptable. Most problems are with online access and underlying trading system. Here is the list of problems, some of them are extremely critical:
1. Poor security. Online login to your account taxes maximum of 6 characters in password and these passwords are not even case sensitive. Any teenage hacker can break-in to your account in less than 10 minutes. Trading passwords are more secure, but I am still uncomfortable that it is so easy to access client’s holdings – to me it’s a big privacy issue. I raise this issue with IL over 3 years ago and they told me that this will be fixed soon – nothing is done as of Jan 2015.
2. Overloaded servers. Try logging in to your account around 9:30am or 4pm. It takes 2-3 failed attempts (with very “informative” errors like “The proxy server did not receive a timely response from the upstream server. Reference #1.ec2bf648.1422285118.ef29fd99” or “We’re sorry. The page you are looking for is currently unavailable. Please try again.”). This morning I couldn’t login to my account for 25 minutes. Even when you are successful with login it takes up to 3 minutes delay until you get to your portfolio page. Often, you get disconnected for no reason just because their servers cannot handle that many simultaneous connections. Typical response from IL support: “our investigation shows that there was no issue related to slower than normal website responsiveness”)
3. Poor customer service. I reported a number of problems using their support system – the answers I received were either inappropriate (e.g. “we cannot confirm your complaint looking at our server logs) or plain stupid (“May be you should try another browser?”, “Close the session and login again, it may help”)
4. Incorrect calculations of totals for market value and unrealized gains/losses. The numbers I see on the screen don’t correspond to reality – I have to manually export my portfolio page to Excel to get correct numbers. This problem is intermittent, but it occurred to me at least 4 times in the past month.
5. In on one of my accounts I actively trade in options and in the past 3 months I encountered at least 5 days when I would not be able to see bid and ask for all my options for hours. Suddenly, all bid and ask values go to zero and even when you click on the option to trade you get zero values in trading screen. As you can imagine, this is totally unacceptable for options trader. I just love the answer I got from IL support (the screenshot was taken at the middle of the trading day and showed zeros for 15+ options, including GOOG, BX, CNQ, ENB, etc.): “With reference to the screenshot you had provided, the prices were reported accordingly as the option holdings had $0.00 bid”.
At this point I had enough and will be moving to another discount brokerage. It is too bad as IL used to be the best in Canada. I don’t know who re-designed their interfaces a couple of years ago), but apparently it was designed and maintained so badly that they can no longer provide service to clients and they are obviously unable to fix these problems.

While I think BMO InvestorLine could use a few improvements such as commission free ETFs, lower trading costs, a better streamer with more indicators and more tools for dividend investors I have not encountered any of the problems Mike listed in his #2, #3 or #4. I’ve been a, mostly satisfied customer, of BMO InvestorLine since 2007.

Just discovered a new ugliness ;) at TD Waterhouse. Once they have implemented the full USD support for RRSP and TFSA I can no longer use my full buying power in RRSP. Example: I have 10K cash in RRSP and $2K USD. I want to buy something that costs $2500 USD. Before this change I could easily just buy it. The system would automatically use my 200 units of TDB166 mutual fund (TD’s weird workaround for USD in RSP in the past) and convert the difference from CAD, i.e. it would exchange some canadian dollars to get exactly what is missing, e.g. $500 in my example. Now it is not the case. The system actually refuses the transaction with “not enough cash” message. So either you are forced to always keep excessive amount of USD or manually convert most likely excessive amount from CAD to cover your trade.

You are missing one of the major discount brokerage providers on here : National Bank Direct Brokerage. One of the leading brokerage plateforms in canada but doesnt seem to get the exposure or recognition that it warrents.

I have been hoping for a long time for IB brokers to allow registered accounts. I am currently an IB brokers client for a cash trading account and I have all my registered accounts with TDW and RBC.
I am relatively satisfied with RBC and TDW. However there are things in IB that surpass them by far. For example the settlement of funds in IB is by the end of day if not instantly as far as I can see. As a matter of fact with IB you can get a daily statement. With RBC and TDW you have to wait a couple of days for settlement from the underwriter.
-With IB brokers their security system is second to none. They just give you random codes that you enter from a card they give you and have to sign in only once. With RBC and TDW after 20 minutes of inactivity your accounts lock out. How can you be an active trader with this nonsense? beats me .
-Prices for options are dirt cheap in IB. In TDW and RBc is highway robbery, plain and simple. Also with TDW and RBC stock purchases are 9.99.
-The one thing that concerns me about IB is account management for several accounts ( cash and registered) with their interface. Which means that if I have five accounts , I would have to have 5 monitors for active trading. With RBC , there is a scroll button that takes me from one account to the next, and I can give a customized name to each account.
-Customer service courtesy is not big with IB, but I seldom call them so is not a big issue for me.
Just some points to consider.

I agree with your points. Although TDW has improved a bit last year – now they do update your cash balance almost at real time. Also they update your positions more often, not on next day. Still, account reporting at TDW is simply too primitive. Statements are very unclear and hard to decipher. Confirmations are the same. For cash/margin accounts it is very inconvenient to work on your taxes when using TDW. Most of the improvements TDW does are cosmetic. Customer service gets worse and worse. I called them twice this year – first time I was successfully authenticated with my voice but the agent said that it “did not work”. Last time I called them – I was not even prompted for voice authentication.

Another thing you mentioned that I find very very important is security. Two-factor authentication is such a simple thing. Can be done even with a smartphone app. And who would argue that any authentication based on password + a token is worse than just a password? The more money you have in your account, the more you get concerned about what damage can be done to your future is someone simply steals your password. And these things do happen even to the most careful people :( So, IB scores big time here – with 100K+ they just give you free RSA-like card.

Prices..no comments. Especially option exercise/assignment at TDW.

So far I think I cannot complain about the customer service at IB. They usually respond fast but often the answer is too brief and requires additional clarifications. Looks like they are not very good in “selling” their service. I understand that they target professionals etc but they could be just a bit friendlier and proactive.

I am seriously considering trying their RRSP/TFSA offerings. I did my concerns about their product in my previous posts. But I think I will take is slowly. First I would like to hear about someone else’s experience with IB RRSP. Second, I need to get rid of some mutual funds that I still have in my RRSPs and I am slowly redeeming them. I would replace them with ETFs long time ago but, again, commissions at TDW were making it less attractive comparing to inexpensive e-series funds.

@Rob – write “The one thing that concerns me about IB is account management for several accounts ( cash and registered) with their interface. Which means that if I have five accounts , I would have to have 5 monitors for active trading. With RBC , there is a scroll button that takes me from one account to the next, and I can give a customized name to each account.
-Customer service courtesy is not big with IB, but I seldom call them so is not a big issue for me.
Just some points to consider.”

Rob – I have 4 accounts with IB and they are all linked. I login once and have access to all 4 accounts in a single window. I can pick from a drop down list to view only one account or look at the consolidated holdings as a single view. My 4 accounts include TFSA and RRSP. As you stated, trading options in IB is very profitable and I now write a lot of in-the-money covered calls in my TFSA and RRSP. I love getting called away and repeating this method for a nice safe and profitable trade.

Optionstrader. Another question. I am not sure if it was mentioned before , but with reference to the monthly data fees. Do you have to pay those for each account? Are there any inactivity fees?
thx for the info.

I just contacted IB live chat. This is the transcript for everyone to see and then decide:

Alexandre R: How can I help you?
me: I have several questions, first , do you allow shorting in TFSA and RRSP accounts? If not am I allowed to buy puts?
Alexandre R: No trading on margin – all purchases must be paid in full; No account debit allowed.
Accounts are restricted to cash balances in CAD and USD.
An FX currency trade must be executed for buy trades if the customer does not carry a balance in the given currency ( CAD or USD ) since a margin loan is not allowed in these accounts.
Free ride in effect, i.e. no waiting for a settlement. A purchase for the account can be sold in part or whole on the same day ( similar to IRA account ).

The RSP and TFSA accounts are allowed to trade the following qualified investments (QI):

Stocks listed on designated US and Canadian exchanges (See table below)
Long call equity options resulting in a stock position on a qualified investment.
Long put equity options resulting in a stock position on a qualified investment.
Short call equity options with a fully covered position on a qualified underlying stock ( covered call ).
Long put equity options with a fully covered position on a qualified underlying stock ( protective put ).
Long put/call options on indices.
Warrants if the underlying asset acquired under the right to purchase is a qualified investment.
Installment Receipts reflecting a partial payment on a share listed on a designated stock exchange.
Rights if the underlying asset acquired under the right to purchase is a qualified investment.
U.S. Bonds.
FX conversions limited to USD/CAD

The RRSP and TFSA accounts are restricted from trading the following non-qualified investments (NQI):

Leveraged FX (LEVFX).
Futures.
Future options.
Short selling on stocks, equity, and index options ( other than covered calls ).
Over-the-counter bulletin board (OTCBB).
Pink Sheet stocks.
Contract for Difference (CFD)
me: great thx.Do you cover the transfer fees charged by other institutions? I asked this because many banks do so, if you have a certain balance
Alexandre R: We do not, but then we do not charge transfer out fees
me: What is the max number of accounts I could link to my account?, ie my wife’s TFSA, My TFSA, my RRSP and my wife’s RRSP. Maybe by wife’s investment account ad so forth
Alexandre R: You could link them under a friends and family account and have up to 5. We are currently working on increasing that number
me: thx, What about fees, how does it work when you have all linked?
Alexandre R: Each account minimum commission of 10 USD per month if account has 2000 to 100 000$
Alexandre R: For commission, depends on how you trade
Alexandre R: You could trade all on master account and only have market data on master which would reduce fee per account
me: Let me get this , so if I have 5 accounts and if I trade 50 dollars worth of trades per month on any of those accounts , the fees are then technically waived?
Alexandre R: Yes
me: what about market data subscriptions. Do I have to pay that for each account?
Alexandre R: Only on master account and it is optional
me: Could you please tell me if I am paying the appropriate market data subscriptions, I want to see amex, nasdaq and Dow live quotes as well as TSX live quotes , I am subscribed to US Value Bundle , US Value Bundle Plus as well as Toronto stock Exchange fees. Do I need both US bundles? thx
me: I also buy options
Alexandre R: US value bundle plus is only for futures
Alexandre R: you then also need US Options 1.5 USD
me: Are the settlement on any registered accounts done instantly, so the balance on any account is accurate at any point in time of the day?
Alexandre R: Yes, there is the free riding rule. Cash balances are accurate in cash accounts as well
Alexandre R: You are referring to settled cash I believe, which you can view in your account window regardless of your account type
me: Yes I meant the latter thx. Can I transfer accounts IN kind to IB?meaning non cash from another institution?
Alexandre R: Yes
me: In all registered accounts I assume the mandatory currency base is Canadian dollars?
Alexandre R: YEs
me: But you don’t allow forced Currency conversion? so for example If I would like to purchase Microsoft, but I dont have Us dollars. I first buy American dollars make the purchase, then sell it and is not converted back to Can dollars automatically?
Alexandre R: Never converted automatically (except sometimes in case of margin call)me: In order to be able to invest on behalf of my wife’s TFSA, RRSP do I/her have to sign any legal documents?
Alexandre R: If the account is set up under the friends and family set up, no need for legal documents
me: Any plans to expand the scope to LIRA accounts or RESPs in the future?
Alexandre R: Unfortunately not in our plans
me: In order to start the transfer process and application. I take it, I have to go to the Canadian side of IB brokers internet site?
Alexandre R: Yes.http://www.interactivebrokers.ca

me: Well that is all for now , I will digest all the info and decide. Thx for your time. I really do appreciate it.

Rob:
I have nothing bad to say about IB at all. My big thing is saving money on any and all fees, forex conversions, option trades etc. IB wins on all of these and very significantly.

I have now been using IB for me RRSP and my TFSA for a few weeks now and I couln not be happier. For example, I bought 300 shares of MSFT and sold covered calls at $41, $42 and $43. All my shares were assigned and I paid no assignment costs. These 3 calls would have cost me $72 at questrade ($24 for each strike). That makes that trade uneconomical at Questrade but it was a very profitable one at IB.

I would not worry about forex conversion. My cost to convert $25,000 CDN to US$ is $2.50. I believe Questrade charges approximately $500 for that amount! And as stated by John, subscription fees are charged to one account only.

Good luck and let us know what you decide. As for me, I am very happy with IB.

In process of opening the advisor account with IB (actually, just opened) and moving some accounts from another broker. So far I have found that Family Advisor account support at IB is far from perfect. First, the fee structure is somewhat confusing, they even have a mistake on their own web page explaining the fees :) Second, the way they charge these fees is also unclear and I have got two absolutely conflicting answers from their own support over chat. Also the account linking process happens once a week on Fridays…and in order to link your account you need to switch to fixed commission structure (but the advisor can use the tiered one so the disadvantage is temporary)…Opening other accounts is an annoying repetitive process – if you already have a margin account and want to open TFSA you still need to go through all the forms and prompts – and this process always times out in the middle so you have to re-login and resume.

Will see how it works out at the end.

About the fees, I have found a little detail that makes it less predictable if you do not trade like crazy on all of these accounts. Assuming you have 5 accounts, all below $100K and, thus, you need to generate $50/month in commissions. You generate $50 on one of them and 0 on others – you won’t pay any additional fees. But if you generate $49 only on one of them and zero on others, then IB reassesses the inactivity fees for each account and will gladly charge you $40 – i.e. $10 for each dormant account, not $50-$49 as I was told originally. I find it a bit unfair. I understand that they want active traders but, still, I imagine that people like me trade at different pace on different accounts.

Got some additional clarifications from IB…indeed these guys make the things complicated…

Quote: ”
There is indeed a new feature to charge client fees to the master which implies that all fees would be supported by master account. The master account must maintain 1000 USD or equivalent after fees or the fee will be affected to the sub-account. This is currently the only way to have the RRSP fee not charged on the RRSP account.”

Well…maintaining 1000 USD in cash is roughly equivalent to $25/year of lost interest…not too bad – especially if IB does not really charge for transferring the cash between the IB accounts in the same name.

I have discovered an interesting thing about IB today. I have noticed that they now have iOS (and Android) apps for generating the login challenge responses. This eliminates the need for the smart card. I was able to activate it for two accounts without any issues.

I have to say – these guys are really serious about the account security, something I like a lot.

I am wondering how do they announce all these features? I do not remember receiving any emails from them – neither about RRSP/TFSA back in December, not about this security feature…

Hello,
Has anyone ever seen such problem in tax filing?
I am facing some trouble about reporting capital gain/ loss from investment in publicly traded shares. Individual tax filing has schedule 3 and T5008 that needs to be completed. After completing that I found entries from T5008 have added up in schedule 3 , making all figures appear twice than they were.
I can call software developer. But I do not know if this is an error in program or should I use T5008 for 2014 tax year and cover the rest of gain/ loss of prior years in schedule 3? In that way it will not double.
My question is: Why is there a duplication of data required and whether should I report in schedule 3 and in T5008 as well, and what about figures that are doubled. I am using Tax Studio as software.
thanks

Interactive Brokers platform does not seem to be that stable….Right now I am facing some quite scary problems – all my positions have disappeared, I see only cash #8-(). Hopefully they resolve it soon. If they do some sort of maintenance – then they do it quire carelessly.

One important tip for TD Waterhouse customers who transfer their accounts out of TDW. Once the account is transferred out they block your access to the account history. So, you lose all the online statements and confirmations for this account. Not too bad for registered accounts (unless you track your investments carefully as I do) but definitely a big issue for cash/margin accounts. Without some statements and confirmations you won’t be able to properly calculate ACB for tax purposes. Not to mention that sometimes they reclassify the dividends 1-2 year backwards…

Better to download everything before moving the account + take the snapshot of the recent account history.

I have been a virtual brokers customer for more than 3 years and I would not recommend anyone to be with them. They have a horrible customer service. I was first of all charged US TFSA fees for two years 2013 and 2014 together in 2014. When I asked them why they said they forgot to charge it 2013. Second, I requested them to close my account and they said the interest charges are not charged yet. It took them 3 months to charge interest for one month and my account close request is still not processed. This has been the worst experience I have had with of the brokerages I have since 14 years of investing in Canada, Dont be fooled by their low commissions.

Just discovered another little hiccup with IBC. I have noticed that one of my account transfers (to IBC) got stuck for too long. Tried to get some information from them…finally after two chat sessions I was told that they have a problem on their side with one of the securities that I have – STX (Seagate Technologies). It is “not set up correctly” in their database. Hmmm…Interesting. Hopefully they will fix it soon.

As an paranoid IT person, all these troubles lead to one concern that started having recently – can we really trust our brokers 100%? Did it happen to anybody to lose a position (or part of it) because of a software bug? Honestly, I have no idea about how the broker’s backends and books are organized. Certainly, any software has bugs but some bugs are worse than others ;)

Does anyone know for Tax purposes under IB we simply fill out book value and disposition amounts in T5008 with the form IB provides? We don’t have to report based on trades right? The total figures should suffice?

Personally I never entered individual stocks. I always do my own spreadsheets and always report complete amounts. At the end, I know that even if CRA challenges my numbers – I am right as long as there is no additional tax due. So, if you have 4 times $250 capital gain or you report $1000 capital gain – same thing.

Also I never trust any forms from the brokers. From the mutual funds – yes, because only they have the raw data. I verify all the numbers the broker provides, I calculate the ACB according to the original trade confirmations and distributions (anyway, brokers do no track the things like ROC and reinvested dividends, for example). It is time-consuming and I am yet to find the best way to handle it, but at the end I am confident in my numbers.

“Box 20 – The amount in box 20 may or may not reflect your adjusted cost base (ACB) for the purpose of determining the gain or loss from the disposition of the security. You are required to make the adjustments, as needed, to the amount indicated in box 20, at the time of determining and reporting your gain or loss from the disposition.”

and

“This information slip does not have to be attached to your income tax return, but you have to keep it in case the CRA requests it.”

To me this means that it is provided for reference purposes. As always, you may be asked to justify your numbers and you’d better be prepared to do so with the statements and trade confirmations in your hand.

@ Nikolai, @Tax_help
I read your comment on MF, and ACB.
Your broker sends a report every year for tax purposes, they carry out ACB calculation taking into consideration the reinvested dividend, apparently by using computer program (for their thousands of clients). Individual calculation would be very difficult. You may verify this.
I do not want to boast but this year I entered almost 125 entries in CRA tax filing. It is not difficult, just little time consuming. Looking at report CRA knows it all.

Maybe I misunderstood you, but when I was talking about the MF, I was saying that with MF you do not have a choice but to trust the MF reports, and that’s fine because: a) they are all Canadian anyway b) they take responsibility for these tax materials. For individual stocks and ETFs it is a different story. For example, U.S. ETFs often do distributions that are not just plain and simple dividends – they have ROC and reinvested dividends inside. Cannot speak for all Canadian discount brokers, but TDW was always simply taking the actual amount of distribution (before 15% US tax) in USD and providing both numbers in T3s – as foreign dividends and foreign tax paid (if I remember correctly).

TDW could also simple decide and recalculate your dividends two years backwards sometime in March or so without even telling you. The only thing you would probably notice is a slight change in the cash balance and additional entries in the account history. The latter covers only few recent transactions. I have complained to them about it but they did not care at all.

As for CRA, I simply do not use their worksheet because it is not detailed enough. I prefer my own worksheet and I do not like the idea of spending time and moving some numbers from my worksheet to theirs. So, I think, when the time comes and they decide to question my numbers I can either give them my worksheet which has it all, or give them their worksheet – depending on what will make them happier. If they can be happy at all ;)

I know you were contemplating earlier in the thread – have you opened an RRSP with IB? Any issues encountered? Doesn’t look like annual fee of $50 is avoidable.

If I am only planning to run a couch potato, would Questrade be a better choice than IB?
Looks like even with the $50, you break even quite fast once you become an active trader – especially transacting in USD.

I have moved two TFSAs and one RRSP so far to IB. The only technical issue I had (not really RRSP-specific) was about Seagate stock, but IBC has resolved it quickly. Well…quickly after I pointed out that the transfer process seems to be stuck after two weeks ;)

I look at the annual fee from different perspective. I took my last year annual statement and got the amount of commissions I have paid to TDW. Then I roughly estimated how much would I pay to IBC. Then I have realized that even factoring in the annual fee I would be saving quite a bit IF I do same amount of transactions. And since the transactions are cheaper, quite possible I will do even more – which is a direct saving. There is still a big gap between me and anything that you may call “active trader” (and this is not a goal – BTW ;) ).

I have also tried to convert some CAD to USD and realized that with IBC’s approach you may still relatively efficiently contribute USD to RRSP. Yes, double conversion etc – but it is not anywhere as bad as with the banks ;)

One thing I am definitely missing in IBC user interface is a quick access to the recent history of the account. With TDW I could do it in one click. With IBC it means running a query and it just displays too much data :) I suspect I will do some coding in the future to address this shortcoming.

The main disadvantage that I see comparing to the banks is the absence of commission-free index funds. Yes, commissions are low, but still – I was successfully using TD e-Series funds for part of my portfolio, rebalancing often enough or even trying to time the market a bit. With IBC you have to stick to the ETFs. I have not done the math yet to see what is the “sweet spot” in terms of how often you would trade EFTs to achieve the same efficiency as with e-Series funds. In many EFTs the MER is lower but you pay the commission. In funds the MER is higher but there is no commission – so I am sure there is a sweet spot somewhere. I do keep part of my account in index ETFs to reduce the volatility and control how much time do I spend managing it.

I am about to move more accounts to them, but I really need them to raise that limit of 5 accounts per “family advisor”.

I totally agree. I am OK for some kind of minimum expected commission per month for real accounts with securities – there is at least bookkeeping that needs to be taken care of. Plus, it is a barrier for small clients that IB does not want to see. Maybe unfair but still acceptable. However, the fee for a dummy “umbrella” account that cannot hold any securities…that’s really unfair. I believe they should be waiving this fee.

I am and I am slowly transferring more family accounts to IB. As I said in one of the previous posts – I simply calculated my total commissions for my existing TD Waterhouse accounts for past years, calculated what minimums I will need to pay to IB for maintaining them and estimated my transaction costs. Even if I simply keep the same (relatively inactive) transaction pattern I save quite a bit of money with IBC.

For the calculations, they have the process outlined on one of their pages. It is a bit unclear, but briefly it is like this: they calculate the total minimums for all accounts (plus the advisor one) and compare it to total amount of commissions they collect for all of these accounts in month. If they collected more than that minimum – you are off the hook ;) If it is less – then they go account by account and charge the difference between $10 and whatever you have paid for each account. And that’s how they calculate the additional charge. Of course they skip the accounts that have 100K – they are not subject to the minimum fee.

By the way, just found something interesting about IBC…I have noticed that they have charged me a mysterious “IRA Quarterly Fee” for both TFSA accounts. Either I misunderstood something, or they were not supposed to – this fee is only mentioned for RRSP accounts. Inquiring…

That is interesting, please keep us updated.
So the umbrella “advisor” account actually counts as one account but you can’t trade in it. If you linked up 3 trading accounts, you need to generate $40 minimum if instead of $30?

Follow-up on IBC and TFSA quarterly fees – got the answer to my ticket. “These fees were charged by mistake, they will be reversed shortly.”. Good. However, it proves, unfortunately, one very simple thing I have learned in the past from other financial institutions: trust no one. Even the banks make mistakes. I prefer to think of them as mistakes – otherwise it would be too depressing ;)

One of the ways Questrade offers low commissions and free commission-ETF purchases is because we pass along ECN fees to only those clients that incur the costs. These fees are levied by electronic communication networks and alternative trading systems to use their networks.

Having been a Questrade client for years, I have to say that I am sick and tired of their incompetence regarding tax slips.

First – they release them late – at least a month later than my TD Brokerage account does. This causes problems for me since I have to file US tax return too – which is due April 15th.

Second – they release them with errors. Last year they cancelled all the T slips for my family and released amended ones – which caused problems with the CRA for my mother in law – problems that I am only now getting straightened out.

This year I could not understand our tax slips – since they did not match earnings listed on monthly statements. I sent Questrade a request for explanation – they responded by notifying me that amended tax slips are now available…
This is after the date US taxes were due – so now I will have to file amended returns again. Since everything is computerized – I simply find such incompetence inexcusable.
As much as I liked other aspects of Questrade – I’ll be moving all of our accounts elsewhere.

This is Carl from Team Questrade. I’m sorry to hear about the difficulties you encountered in obtaining accurate, timely tax slips. If you are still having troubles with either understanding the slips provided, or if you are missing any information, please send me an email at cbranch@questrade.com and I will escalate the matter.

Reporting back from transferring 2 TFSA and 2 RRSP accounts from RBC to IB brokers. It was a bit tedious , but it got done.
All I can say that IB brokers surpasses any broker in Canada overall. With pricing, robust platform , security , etc. Very happy I made the move. Thanks again to all the folks here on answering questions and for the info.

Need an advice on frugality :) I have recently discovered that I cannot transfer certain things to Interactive Brokers. More specifically, some stuff from the companies like Manulife, Sunlife etc. Reason: they have no ATON, thus automated transfer is not possible and IBC deals only with ATON. They do not want to process T2033 forms.

So, here is the question: what is the most economical way to get the funds (more specifically – just cash) from such a dinosaur RRSP to IBC? I was thinking maybe about something like Questrade – they seem to support ATON, they most likely can handle T2033 and their transfer fees are more reasonable than with TDW and alike. I hate the idea of opening another registered account as a proxy just for transferring something once (or once a year) but the alternative is to withdraw, suffer the tax deduction, then put some of my own money, extra tax paperwork…But maybe someone knows a better/faster/cheaper solution?

Did you ever figure out what was the best course of action transferring assets into IB RRSP? I’m in the similar situation as you…I have cash in a RSP savings @ Tangerine doing nothing but I can’t get it over there without withdrawing then contributing. The only way I can think of is to transfer into Questrade and then transfer out again… Such a hassle.

Maybe its better just to stick to questrade but the availability to sell options + US conversion makes IB a better choice

I have just solved my problem by opening an account with TD Waterhouse, transferring the funds into that account (in cash) using T2030 form and then transferring that account in full to IBC. Looks like this is the only way. $135+tx sucks, but if the amount in question is significant than it is not that bad. Yes, it is a bit complicated but then it gets simpler when you have all of your buying power under the single account.

I think Questrade changes a bit more for the transfer. I checked a couple of brokers from the list that IBC offers – $135 was the lowest price. Also I did not want to deal with the brokers that I never dealt with. Like, for example, I would never deal with Desjardins or RBC, I think I am not compatible with their mentality ;)

Hi everyone, can someone give me a few suggestions, i’ve been trying to find answers but can’t seem to get to the bottom of this. I want to play NASDAQ stocks, and be able to do this: short sell, trade after hours and pre-market hours. I am in Canada. Can someone suggest to me a Broker to do this with? I am currently with BMO Direct InvestoreLine and i trade NASDAQ stocks with them all the time, but just regular trades, with $10 fee per trade (so $20 to buy and sell in total). Thanks!

While I may be just a little biased, since you are an active Canadian trader I’d definitely recommend that you look into Questrade.
With Questrade you get low commission fees on equity trades, access to both pre- and post-market trading, and short selling through our IQ platform.
For more information, you can read the MDJ review right here: https://www.milliondollarjourney.com/questrade-review.htm

I am going to throw another stone at TD Waterhouse. Back in May I have transferred several accounts from them to Interactive Brokers. Once the transfer has been completed, the account have immediately disappeared from WebBroker and it was impossible to get any statements or other documents about them. To my surprise, two accounts have re-appeared in the end of September with some cash balances on them. Once I have noticed it, I have immediately downloaded all the new documents for them. And this is where I found that few days after the transfer was done back in May/June I have received some dividends on these accounts. TD Waterhouse has never done the residual transfer, which is supposed to be done “promptly” according to IIROC 2300.8 rule. Since then (it’s been 3 weeks) I am fighting with TD to get my cash transferred to IBC. So, not only they have failed to do the transfer, they were quietly holding these money for several months and up until now I have spent over 2 hours of my time fighting with them. Unfortunately, these are RRSP accounts, so simply taking the cash out is not the option I would consider.

Replying to myself. Got some more info from IBC clearing department. According to them TD Waterhouse is not able to properly do residual transfers! So, the solution seems to be re-initiate the full account transfer (as silly as it sounds – do another full account transfer several months after the first one was done ;) ). Hrrr…..Called TDW, spent another 20 minutes on the phone, told them to put a note “do not even think about charging the fee for this transfer” on all accounts, initiated new transfers, fingers crossed.

Seriously…I had quite good opinion about TD – except their fees and outdated platforms. But non-compliance to IIROC rules….this is something I would not expect from them.

Believe it or not. After fighting for weeks with TDW I have resolved the issue – got these residuals transferred. I thought I would never hear about it again. Guess what? Just got a call from IBC about that. TD Waterhouse tried to CHARGE my IBC account for $2.30 mentioning some sort of fee. I told IBC to reject the transfer and called TDW. Turns out, TDW has sent me a paper bill and that was the fee for it. Paper bill for the account that has been enrolled in e-bills since the beginning, that has been fully transferred to another broker TWICE! OMG. The only thing I could tell the guy – do whatever you want but I do not want to hear about these accounts and any fees from you again anymore. The fee has been refunded (of course). Lets see what happens next. I am actually going to file a complaint to IIROC about this residual transfer story.

We have 2 rrif accounts in canada with tdwaterhouse but retired in england.
TDW will on longer do direct wire transfers and will only send cheques. It cost us over $100 to cash the cheques and put into our canadian dollar uk bank account plus we could not convert the money for 6 weeks to make sure it cleared the canadian bank first.
Do you know of any brokers in canada who we can transfer out rrif’s to that will arrange our annual withdrawals via wire transfers?

CIBC Investors Edge is the worst brokerage platform by far. Sure, the commission rate seems quite good, but the couple bucks you’ll save each month isn’t worth the opportunity cost you’ll face due to their system issues.

I know someone who works there, and they warned me that 12% of all their client trades don’t go straight to the stock exchange. The order needs to be reviewed by an employee, a process that takes anywhere from 30 seconds to 5 minutes. Do you want to wait 5 minutes while the market moves away from your target price? And that’s if they don’t have any major system issues. When they do have major system issues (about twice per month), your equity or option order may be stuck in their system for anywhere from 5 minutes to more than an hour. They tend to have this problem whenever the market becomes very volatile (most traders trade more frequently on volatile days , but you probably won’t be able to with CIBC)
The positive side of this is that if your order takes longer than 5 minutes to be approved, and if you call to complain enough or threaten enough, CIBC will pay your opportunity cost (you must be able to show that your trade would have been filled if approved within 3 minutes, so don’t use a limit price really close to the market price). This process requires a lot of time on the phone though.

Just made an interesting discovery about Interactive Brokers. I still love them :) but they do have some weirdness too. I was verifying my tax calculations, which I always do with any broker. I have spotted a strange mismatch between my calculated cost basis and what IBC reported in their statements. I never rely on broker’s cost basis because they often do not do it right, they do not account for the things like ROC or reinvestment dividends for ETFs…Long story short, it turned out IBC uses them calculation method that is commonly used in US (IRS-approved) – FIFO. So, not like in Canada where you have to work with average cost. So, in case if you have a position that you have built over time with several purchases and then you sell a part of it, then both the cost basis of the remaining position and the capital gain/loss from the sale will be incorrect. As well as the numbers for any subsequent operations.

I do – from the moment they have announced it. So far so good – for RRSPs, spousal RRSP and TFSAs. The only hiccup I have discovered was a “IRA fee” (RSP fee) that they have charged also to our TFSA accounts. But they have fixed the problem promptly after my inquiry.

I came across this post when googling “Tangerine ATON transfer”. I’m in a similar situation now – have RRSP with manulife and want to transfer to a self-directed RRSP account with IB. Looks like transfer from manulife -> other bank -> to IB is the only cost efficient option. My question is, does anyone know if BMO supports ATON?

It is not so much of a question if BMO supports ATON (most likely they do) but rather if IBC can do ATON with BMO. I have just logged in to my IBC account and checked what delivering institutions are offered for ATON transfers. The only item in the list that looks like BMO is “BMO Nesbitt Burns”. Not sure what it is. When I click on it I see this prompt:

“Choose BMO Nesbitt Burns for Investor Line accounts also.

Enter your account number with 10 digits even though your statement may only show 8. Check with your broker for the additional digits at the end of your account number. An incorrect account number will delay the transfer of assets.”

But, interestingly enough, I see “Manulife Securities Incorporated” in that list.

Even if BMO is not in the list, you should check who actually does the account management for them. It may be another company, although I doubt that. For example, I know that Penson does it for several brokers and when I choose “Penson…” I get this prompt:

With something like TD your transfer will cost you about $143+$25+tx, so about $190. The expenses that you cannot recover. Well, you can look at $143 from different perspective – these are RRSP money, tax-free. Still, quite an amount.

I did see Manulife on the list and I tried to initiate the transfer but failed – I guess my RRSP is with other subsidiary of Manulife…

How did you come up with the $143 + $25? For banks like TD and BMO they seem to have an annual admin fee of $100 if balance is < $25k, and I'm sure will fall into that range if I'm just using them as a proxy, so does it mean additional $100?

I'm comparing several options and so far I know Questrade will charge a $150 for transfer out (probably + tax too) and seems no other fees apply.

I was assuming that you would be doing cash transfer, not in-kind transfer. Usually the choice of the investment finds with these companies (SunLife, Manulife etc) is so poor that it is either impossible or not practical to do in-kind transfer.

TD, for example, has two types of self-directed RRSP. One is $100/year, another one is $25/year. It is limited to cash and mutual funds. So, it is going to be $25 for the account and $143 of the full transfer fee.

RSP account transfer is a frustrating headache, and time-consuming.
Most of all, every financial institution has their own set of fees for one service or the other. I am against such fee-structure, I wish CRA should regulate the transfer fees as well. In-kind transfer may be possible for MF investment via selling & buying back again, it can be risky for equity investment. Depending on type of stocks & quantity, one can easily loose money upward of $100, due to market volatility. It can be time-consuming process, but all financial institutions have to provide the in-kind transfers if they support the same services on their platforms. Many of them do not provide services to our satisfaction even after paying fees.

I would not say that RRSP account transfer is such a horrible experience. What is better – do a bit of paperwork and enjoy a rich choice of investment tools or continue losing money in these company-assisted RRSPs with SunLife/ManuLife and others where you have like 5-8 mutual funds with MERs over 2.5%? I did a couple of transfers in the past. The idea was to prepare for them in advance, slowly sell your positions in these mutual funds over time. Then you are all-cash and you do your transfer.

Most brokering company will have provision for in-kind transfer, because they cannot ask the client to sell their securities at other fin institution and then buy on their platform. Transfer from one institution to another is big headache and on top there are hefty fees charged. I do not know why the fees are not regulated by BoC, that will just simply the whole scenario.

How have you found trading with IB ? Is it as bad as everyone says it is? I am with Questrade but the commissions are way to high and they seem to have hired cheap help for their customer assistance team.

Note that with IB, you are required to make spend a minimum amount of commission ($10USD/month) or else they will charge you the difference. As well, with IB, data feeds are extra. If you make more than 2 trades a month with Questrade, then IB may be worth it (providing you get data fees from elsewhere).

Yes, but only for the accounts under 100K. I did my math and even if I do the same (modest) number of transactions IBC is cheaper. I was with TDW before. Minimal commission is $9.99, IBC’s monthly fee ;) Sell and buy few covered calls and you are way above $20 in commissions with TDW. I am not even mentioning the crazy $43 assignment fee…

I have had a Shareowner account for about 10 years. I used to contribute every 3 months and pay the associated fee, but during the great recession I couldn’t afford it so stopped contributing. Since then I have paid zero fees, and I’m up 350 %. I don’t fool around with it- I just get a notification of dividends reinvested every so often.
They have tried to upsell me to a managed account, but I haven’t seen too many managed accounts that are up 350% in the last 7 years.
I did look into transferring the stocks into an RRSP or TFSA, but they have have fees associated with these. I’m not worried about capital gains tax, because I have enough losses in my other active brokerage accounts (TD Waterhouse and Thinkorswim) to offset my gains for a while. I have learned that it is far more lucrative to just re-invest dividends and compound gains than it is to fool around buying and selling. I’m sure some people are successful traders, but I have proven to myself that I fall into the 97 % that are not.
Shareowner also calculates your adjusted cost base, eliminating the tax nightmare associated with taxable re-invested dividends.
W.r.t. commissions and TOS, in the USA you can get a $0.99 per contract fee, with the $9.99 waived. Unfortunately this is not available to Canadians. If anyone can figure out how to get the reduced commission schedule without having to become a resident of USA, please share…

What about the dilemma of a US-dollar RRSP account that does NOT drip (BMO Investorline). They have auto drip for Cdn equities but not US! This to me is a huge disadvantage and I’d love to hear feedback. Are there any US dollar RRSP accounts that have auto drip for US equities?

This is soooo helpful! I have a question for you. Still looking to leave my FT job with my defined pension.

Now I have a question for you. I probably have 30/40K, obviously looking to transfer it to a LIRA but also supposed to go live in the US next year. What would you recommend? Transfer this pension over to Questrade (or something better maybe?) or look into USD options. Although not great with conversion! As a rule of thumb, when you want to invest USD, is there a website you would recommend? I am also a freelancer and making USD. Will soon be only making USD working from home.

I haven’t just yet but since I am looking at moving to the US I would honestly prefer to invest this money myself. I need to check for health benefits but since I don’t think that I’ll be living in Canada when I retire (not even being from CA originally) I couldn’t care less at this time to be honest with you!

I am Canadian so that shouldn’t be an issue. However, that’s a silly question but can I keep all my accounts if I leave Canada? I think it has been the biggest concern for me since I am afraid that I may have to close all the accounts at some points! However I should be able to keep my LIRA open if if I leave right?

I just don’t want to invest in CAD funds if I then need to close everything because I am no longer a resident.

You’ll need to confirm with an accountant, but you may need to file a Canadian tax return if you maintain Canadian assets (RRSP/LIRA is exempt I believe). I’d be interested to hear what you find out about the taxation issues when moving to another country.

Just wanted to follow up to let you know that I have now fully received the check from the DB Plan and opened a LIRA. After checking with my bank, I will keep both the LIRA and my RRSP if I move to the US but will need to close my TFSA.

Since I am still slowly learning about stocks and equity, my LIRA has been opened (for now) with one of the big banks but I plan to do it online when I am more confident about investments.

Getting my cheque was surprisingly extremely fast. (Less than 3 weeks) which is almost extraordinary for PSPP! Some of it was in cash and taxed at a 30% rate which… well, it is what it is.

Scotia iTrade is the worst!! Buy and sell US stocks in the same account and they will charge you big FX costs to do nothing, i.e. to change USD into USD. These fees dwarf the trading commission. The only way to avoid these fees at Scotia is to pay another fee! All for doing nothing. Meanwhile all the other brokers have zero cost for this kind of transaction (and no fee on top of that).

Tell me which regulators you think can be approached about Scotia’s ludicrous FX charges? OSFI really only deals with banking, not dealers. And the OSC will laugh you off the block if you ask them about FX because they do not consider FX to be a security. As far as regulation of FX goes, fair treatment of customers means nothing.

I recently discovered that sometimes a trade takes 4 business days to settle for Questrade. I bought it on a Friday just before close and it showed it settled on the folloing Wednesday. Usually I don’t pay attention to the actual settlement date, but this one time I did pay attention and it surprised me. I wonder if it’s normal for all brokers.

HW,
Generally T+2 days is the norm set few years ago. That is the notification I received from Questrade. Now I have only RSP with Questrade. Before that notification, it was T+3 days. I just wonder if that late settlement hampered your trading. In that case you must contact Questrade.